Which of the Following Statements Is FALSE

question 77

Multiple Choice

Which of the following statements is FALSE?

• A)A value-weighted portfolio is an equal-ownership portfolio: We hold an equal fraction of the total number of shares outstanding of each security in the portfolio.
• B)When buying a value-weighted portfolio,we end up purchasing the same percentage of shares of each firm.
• C)To maintain a value-weighted portfolio,we do not need to trade securities and rebalance the portfolio unless the number of shares outstanding of some security changes.
• D)In a value-weighted portfolio the fraction of money invested in any security corresponds to its share of the total number of shares outstanding of all securities in the portfolio.

Understand the impact of cost changes on firms' economic profit in a perfect competition model in both short and long run.

Describe the effects of market demand changes on the price and output of a perfectly competitive industry in the short and long run.

Identify and explain the role of the industry supply curve in the context of perfect competition.

Analyze the conditions for long-run equilibrium in a perfectly competitive market, including the zero economic profit condition.

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