Which of the Following Statements Is FALSE

question 65

Multiple Choice

Which of the following statements is FALSE?

• A)If the CAPM correctly computes the risk premium,investors would stop investing only when they expected the alpha of an investment strategy to be negative.
• B)If the CAPM correctly computes the risk premium,an investment opportunity with a positive alpha is a positive NPV investment opportunity.
• C)If the CAPM correctly computes the risk premium,investors should flock to invest in positive alpha stocks.
• D)Anyone can implement a momentum trading strategy and therefore generate a positive investment opportunity.

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Definitions:

FIFO

short for "First In, First Out," is an inventory valuation method where goods purchased or produced first are sold or used first.

Average Cost Formula

A method used in accounting to determine the cost of goods sold and ending inventory by calculating the average cost of all similar items in inventory.

Ending Inventory Valuation

The valuation of goods remaining unsold at the end of an accounting period.

Average Cost Formula

A method used for inventory valuation, determining the cost of goods sold and ending inventory by calculating the weighted average of all purchases and manufacturing costs.