Which of the Following Statements Is FALSE

question 89

Multiple Choice

Which of the following statements is FALSE?

• A) A portfolio's risk premium and volatility are determined by the fraction that is invested in the market.
• B) Because all investors should hold risky securities in the same proportions as the efficient portfolio, their combined portfolio will also reflect the same proportions as the efficient portfolio.
• C) Graphically, when the tangent line goes through the market portfolio, it is called the security market line (SML).
• D) When the Capital Asset Pricing Model (CAPM) assumptions hold, choosing an optimal portfolio is relatively straightforward; it is the combination of the risk-free investment and the market portfolio.

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Definitions:

Adrenal Hormones

Chemical messengers produced by the adrenal glands, involved in stress responses, metabolism, immune system, and other bodily functions.

Emotion

A complex psychological state that involves an experience of thought, physical responses, and cultural or social expressions.

Stress

A physical or emotional response to external or internal demands or pressures.

Biological Rhythms

Natural cycles of change in bodily functions or behaviors, such as the circadian rhythm, that occur in a predictable pattern.