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:

Hormone/Neurotransmitter

Chemical substances that act as messengers in the body, with hormones being released into the bloodstream and neurotransmitters being involved in transmitting signals across nerve synapses.

Trust

The firm belief in the reliability, truth, ability, or strength of someone or something.

Endorphins

Chemical substances in the nervous system that are similar in structure and action to opiates; they are involved in pain reduction, pleasure, and memory and are known technically as endogenous opioid peptides.

Soothing Effect

A calming or relaxing influence that reduces stress or discomfort.