Which of the Following Statements Is FALSE

question 17

Multiple Choice

Which of the following statements is FALSE?

• A)If investors have homogeneous expectations,then each investor will identify the same portfolio as having the highest Sharpe ratio in the economy.
• B)Homogeneous expectations are when all investors have the same estimates concerning future investments and returns.
• C)There are many investors in the world,and each must have identical estimates of the volatilities,correlations,and expected returns of the available securities.
• D)The combined portfolio of risky securities of all investors must equal the efficient portfolio.

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Definitions:

Common Stock

Equity securities representing ownership in a corporation, providing voting rights and sharing in the profits through dividends.

Comprehensive Income

An all-inclusive measure of a company's income, including both its net income and other comprehensive income items that are not included in the net income.

Other Comprehensive Income

Components of total comprehensive income that are not part of net income, including items that have not been realized, such as unrealized gains or losses on available-for-sale securities.

Dividend Yield

A metric showing the annual dividend payments of a corporation as a proportion of its share price.