Which of the Following Statements Is False

question 67

Multiple Choice

Which of the following statements is false?

• A) Systematic risk is rewarded, unsystematic risk is not.
• B) Unsystematic risk can be diversified away.
• C) Only systematic risk remains in a fully diversified portfolio.
• D) Both systematic risk and unsystematic risk are rewarded.
• E) The market portfolio has no unsystematic risk.

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Definitions:

Resource Market

A market in which households sell and firms buy resources or the services of resources.

Financial Capital

Refers to the funds provided by lenders (and investors) to businesses to purchase real capital equipment for producing goods/services.

Raw Materials

Basic materials that are processed or refined to create goods and products in various industries.