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.

Understand basic probability concepts and the principle of sample spaces.

Distinguish between dependent and independent events in probability.

Calculate probabilities for simple and compound events.

Identify and apply the rules for calculating the complement of an event.

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