Which of the Following Statements Is FALSE

question 90

Multiple Choice

Which of the following statements is FALSE?

• A)The tangent portfolio is efficient and,once we include the risk-free investment,all efficient portfolios are combinations of the risk-free investment and the tangent portfolio.
• B)The optimal portfolio of risky investments depends on how conservative or aggressive the investor is.
• C)By combining the efficient portfolio with the risk-free investment,an investor will earn the highest possible expected return for any level of volatility he or she is willing to bear.
• D)The efficient portfolio is the tangent portfolio,the portfolio with the highest Sharpe ratio in the economy.

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Definitions:

Selling Expense

Costs incurred to secure customer orders and deliver the finished product to the customer, including advertising and sales staff salaries.

Product Costs

Costs that are incurred to acquire or manufacture a product, including direct materials, direct labor, and manufacturing overhead.

Depreciation

The reduction in the value of an asset over time due to wear and tear, usage, or obsolescence, this concept is often used in accounting to allocate the cost of an asset over its useful life.

Factory Equipment

The machinery and tools used in the manufacturing process within a factory setting.