Which of the Following Statements Regarding 130/30 Strategies Is false

question 28

Multiple Choice

Which of the following statements regarding 130/30 strategies is false?

• A) Analyst can make full use of their knowledge of undervalued and overvalued stocks.
• B) Long positions up to 130% of the value of the portfolio cab be made.
• C) Short positions up to 30% of the value of the portfolio can be made.
• D) 130/30 strategies are not very popular due to the increased risk of hedging.
• E) The use of short positions creates leverage.

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Definitions:

Mirror Neuron

A neuron that fires both when an individual acts and when the individual observes the same action performed by another, thought to be involved in learning through imitation.

Specific Action

A particular or distinct deed or movement carried out with a purpose in mind.

Amygdala

A region of the brain involved in processing emotions such as fear, anger, and pleasure.

Recognizing Fear

The ability to identify and understand the emotion of fear in oneself or others, often as a survival mechanism.