Which of the Following Statements Is FALSE

question 35

Multiple Choice

Which of the following statements is FALSE?

• A)Margin investing is a risky investment strategy.
• B)Because our return on the risk-free investments is fixed and does not move with (or against)our portfolio,the correlation between the risk-free investment and the portfolio is always equal to one.
• C)Short selling the risk-free investment is equivalent to borrowing money at the risk-free interest rate through a standard loan.
• D)Margin investing can provide higher expected returns than investing in the efficient portfolio using only the funds we have available.

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Definitions:

Neutral Stimulus

A neutral stimulus is initially unrelated and unresponsive to any specific response until it becomes associated with a conditioned stimulus in classical conditioning.

Conditioned Stimulus

A previously neutral stimulus that, after becoming associated with the unconditioned stimulus, eventually comes to trigger a conditioned response.

Reinforcer Stimulus

A stimulus that increases the likelihood of a behavior by providing a rewarding outcome.

Unconditioned Stimulus

A stimulus that naturally and automatically triggers a response without prior conditioning or learning.