Which of the Following Statements Is FALSE

question 74

Multiple Choice

Which of the following statements is FALSE?

• A)If we increase the fraction invested in the efficient portfolio beyond 100%,we are short selling the risk-free investment.
• B)As we increase the fraction invested in the efficient portfolio,we increase our risk premium but not our risk proportionately.
• C)To earn the highest possible expected return for any level of volatility we must find the portfolio that generates the steepest possible line when combined with the risk-free investment.
• D)Every investor should invest in the tangent portfolio independent of his or her taste for risk.

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Definitions:

Future Expenses

Anticipated costs or financial obligations a company expects to incur in the future.

Note Payable

A written promise to pay a specific sum of money at a future date, typically including interest payments.

Promissory Note

A financial instrument in which one party (the issuer) promises in writing to pay a determinate sum of money to the other (the payee), either at a fixed or determinable future time or on demand of the payee, under specific terms.

Prepaid Expense

Payments made beforehand for products or services that will be provided later on.