Which of the Following Statements Is FALSE

question 86

Multiple Choice

Which of the following statements is FALSE?

• A)If the market portfolio were not efficient,investors could find strategies that would "beat the market" with higher average returns and lower risk.
• B)The CAPM states that the cost of capital depends only on systematic risk.
• C)The Capital Asset Pricing Model (CAPM)is primarily a theoretical model and is rarely used in practice to estimate the cost of capital.
• D)The market portfolio is an efficient portfolio.

---

Definitions:

Aluminum

Aluminum is a lightweight, silver-white metallic element (Al) used extensively in alloys and for its properties of corrosion resistance and high conductivity.

Chlorine

A highly reactive, greenish-yellow gaseous halogen with the symbol Cl and atomic number 17, widely used in water treatment, bleaches, and industrial processes.

Ionic Compound

An ionic compound is a chemical compound composed of ions held together by electrostatic forces termed ionic bonding, typically formed between metal cations and non-metal anions.

Phosphorus

A reactive, non-metallic element found in Group 15 of the periodic table, essential for life.