Which Statement Is NOT True

question 248

Multiple Choice

Which statement is NOT true?

• A) Portfolio managers should diversify investments.
• B) The promise of higher returns is accompanied by higher risk.
• C) A single investor can consistently beat the market over the long term.
• D) Active stock markets are an important part of the economy.

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Definitions:

Tax Rate

The scale at which the government levies taxes on the financial gains of individuals or corporations.

Face Value

The nominal value printed on a bond or other financial instrument; it is the amount paid to the holder at maturity, though the market value can differ.

Weighted Average Cost of Capital (WACC)

The rate that a company is expected to pay on average to all its security holders to finance its assets, a key factor in capital budgeting decisions.

Cost of Equity

The return that investors expect for investing in a company's equity, representing the compensation for the risk taken.