Which of the Following Statements Is FALSE

question 31

Multiple Choice

Which of the following statements is FALSE?

• A)A portfolio that costs nothing to construct is called a self-financing portfolio.
• B)The most obvious portfolio to use in a multifactor model is the market portfolio itself.
• C)In general,a self-financing portfolio is any portfolio with portfolio weights that sum to one rather than zero.
• D)We can construct a self-financing portfolio by going long some stocks and shorting other stocks with equal market value.

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Definitions:

Selling Division

A segment of a company focused on the sales and distribution of products or services.

Opportunity Cost

The value of the best alternative that is forgone when a particular decision is made, representing the benefits that could have been received from that alternative.

Transfer Price

The price charged when one responsibility center within a company provides goods or services to another responsibility center in the same company.

Return On Investment

A measure used to evaluate the efficiency of an investment or compare the efficiency of several different investments, calculated by dividing the benefit (return) of an investment by the cost of the investment.