Which of the Following Statements Is FALSE

question 6

Multiple Choice

Which of the following statements is FALSE?

• A)The size effect is the observation that small stocks have positive alphas.
• B)When considering portfolios formed based on the book-to-market ratio,most of the portfolios plot below the security market line.
• C)The largest alphas occur in the smallest size deciles.
• D)When considering portfolios formed based on size,although the portfolios with the higher betas yield higher returns,most size portfolios plot above the security market line.

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Definitions:

Real Estate Prices

The amount of money required to purchase ownership or rental rights to land and buildings.

Bank Interest Rates

The percentage charged on loans or paid on savings by banks to customers.

Short-Term Business Loans

Loans provided to businesses for immediate operational needs with repayment terms typically less than one year.

Late 1970s

A period marked by significant economic, political, and cultural changes, including inflation crises and the beginning of neoliberal policies in many countries.