Which of the Following Statements Is FALSE

question 32

Multiple Choice

Which of the following statements is FALSE?

• A)Because of the higher and uncompensated risk involved,no investor should choose a portfolio with a negative alpha.
• B)Because the average portfolio of all investors is the market portfolio,the average alpha for all investors is zero.
• C)The market portfolio can be inefficient if a significant number of investors misinterpret information and believe they are earning a positive alpha when they are actually earning a negative alpha.
• D)If no investor earns a positive alpha,then no investor can earn a negative alpha,and the market portfolio must be efficient.

---

Definitions:

Intense Interaction

Intense interaction refers to a high level of engagement and communication between individuals or groups, often characterized by deep or complex exchanges.

Nominal Team Building

The initial or superficial efforts made to create camaraderie and teamwork among members of a group or organization.

FreeWheeling

An informal decision-making or brainstorming process without strict rules or boundaries, encouraging open and spontaneous participation.

Brainstorming

A collaborative idea generation technique that encourages participants to come up with creative solutions without judgment or criticism during the initial phase.