Which of the Following Statements Is FALSE

question 127

Multiple Choice

Which of the following statements is FALSE?

• A)The Sharpe ratio of the portfolio tells us how much our expected return will increase for a given increase in volatility.
• B)We should continue to trade securities until the expected return of each security equals its required return.
• C)The required return is the expected return that is necessary to compensate for the risk that an investment will contribute to the portfolio.
• D)If security i's required return exceeds its expected return,then adding more of it will improve the performance of the portfolio.

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Definitions:

Statistical Analysis

The process of collecting, examining, interpreting, and presenting data to discover underlying patterns and trends.

Subject Matters

The topics or themes that are being discussed or dealt with in a text, conversation, or study.

Physical World

The material universe that includes all of the physical objects and forces that interact within it.

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Demonstrated to be true or effective through empirical evidence or logical reasoning.