Which of the Following Statements Is FALSE

question 25

Multiple Choice

Which of the following statements is FALSE?

• A)When an investor chooses her optimal portfolio,she will do so by finding the tangent line using the risk-free rate that corresponds to her investment horizon.
• B)If the market portfolio is not efficient,savvy investors who recognize that the market portfolio is not optimal will push prices and expected returns back into balance.
• C)Even though different investors may research different stocks,their information will not impact the market portfolio since there is no way to share this information with other investors.
• D)In the real world,borrowers pay higher interest rates than savers receive.

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Definitions:

International Trade

The exchange of goods and services between countries, allowing for increased efficiency and market expansion by capitalizing on comparative advantage.

Lower Opportunity Cost

A situation where choosing one option over another results in a lower forfeit of potential benefit from the other options.

Self-Sufficient

refers to the ability of an individual, community, or country to provide for all their needs independently, without external assistance.

Trading Partner

A country, organization, or entity with which a business or country conducts trade, sharing a mutual economic exchange.