Which of the Following Statements Is FALSE

question 56

Multiple Choice

Which of the following statements is FALSE?

• A)All investors should demand the same efficient portfolio of securities in the same proportions.
• B)The Capital Asset Pricing Model (CAPM)allows corporate executives to identify the efficient portfolio (of risky assets)by using knowledge of the expected return of each security.
• C)If investors hold the efficient portfolio,then the cost of capital for any investment project is equal to its required return calculated using its beta with the efficient portfolio.
• D)The CAPM identifies the market portfolio as the efficient portfolio.

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Definitions:

Incurred

Refers to costs or expenses that have been realized or acquired in the execution of business activities or operations.

Costs

The expenses incurred in the production of goods or services or in the undertaking of any activity.

Manufacturing Overhead

The indirect costs associated with manufacturing, including costs for maintenance, utilities, and rent of factory facilities, not directly tied to specific units produced.

Prime Cost

The combined total of direct materials and direct labor costs associated with the production of a product, excluding overhead costs.