Which of the Following Statements Is FALSE

question 59

Multiple Choice

Which of the following statements is FALSE?

• A)The market portfolio contains more of the smallest stocks and less of the largest stocks.
• B)For the market portfolio,the investment in each security is proportional to its market capitalization.
• C)Because the market portfolio is defined as the total supply of securities,the proportions should correspond exactly to the proportion of the total market that each security represents.
• D)Market capitalization is the total market value of the outstanding shares of a firm.

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Definitions:

Tax Cost

The financial charge or burden imposed by governments on individuals or organizations in the form of taxes.

Majority Vote

A decision-making process in which the option that receives more than half of the votes wins.

Marginal Benefits

The additional satisfaction or utility gained from consuming or producing one more unit of a good or service.

Proposed Tax

A proposed tax is a tax plan or suggestion that is being considered for implementation but has not yet been enacted.