Which of the Following Statements Is FALSE

question 81

Multiple Choice

Which of the following statements is FALSE?

• A)Because diversification improves with the number of stocks held in a portfolio,an efficient portfolio should be a large portfolio containing many different stocks.
• B)The beta of a security is the sensitivity of the security's return to the return of the overall market.
• C)An efficient portfolio cannot be diversified further.That is,there is no way to reduce the risk of the portfolio without lowering its expected return.
• D)We call a portfolio that contains only unsystematic risk an efficient portfolio.

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Definitions:

Collectivity

A term describing a group of individuals who share or are motivated by at least one common issue or interest, or work together to achieve a common objective.

Experimental Group

The group in an experiment that receives the treatment or the variable being tested.

Control Group

In experimental research, a group of subjects that does not receive the experimental treatment or intervention being tested, used as a benchmark to measure the effect of the treatment.

Controlled Experiment

A scientific test that is directly manipulated by a researcher, to determine the effect of a variable on a particular system.