Which of the Following Statements Is FALSE

question 27

Multiple Choice

Which of the following statements is FALSE?

• A)The most familiar stock index in the United States is the Dow Jones Industrial Average (DJIA).
• B)A portfolio in which each security is held in proportion to its market capitalization is called a price-weighted portfolio.
• C)The Dow Jones Industrial Average (DJIA)consists of a portfolio of 30 large industrial stocks.
• D)The Dow Jones Industrial Average (DJIA)is a price-weighted portfolio.

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Definitions:

Present Value

The present worth of a future amount of money or series of cash flows when a certain rate of return is applied.

Multiple IRRs

This occurs when a project or investment has more than one internal rate of return, typically due to multiple cash flow sign changes over the investment's lifetime.

Negative Cash Flow

A situation where a business or individual's outgoing cash exceeds the incoming cash during a specific period, indicating potential financial trouble.