Which of the Following Statements Is FALSE

question 84

Multiple Choice

Which of the following statements is FALSE?

• A)Because all investors should hold the risky securities in the same proportions as the efficient portfolio,their combined portfolio will also reflect the same proportions as the efficient portfolio.
• B)When the CAPM assumptions hold,choosing an optimal portfolio is relatively straightforward: it is the combination of the risk-free investment and the market portfolio.
• C)Graphically,when the tangent line goes through the market portfolio,it is called the security market line (SML).
• D)A portfolio's risk premium and volatility are determined by the fraction that is invested in the market.

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Definitions:

Cannon-Bard Theory

An idea positing that emotional sensations and bodily responses occur concurrently but are distinct processes.

Bodily Arousal

A physiological reaction to stimuli that involves increased physical activity, such as elevated heart rate, blood pressure, and energy level, often in response to excitement, stress, or fear.

Emotion

A complex psychological state involving three distinct components: a subjective experience, a physiological response, and a behavioral or expressive response.

Paul Ekman

A psychologist known for his work on the facial expressions and emotions, and the co-discoverer of microexpressions.