Which of the Following Statements Is FALSE

question 33

Multiple Choice

Which of the following statements is FALSE?

• A)Portfolios with higher volatility have historically rewarded investors with higher average returns.
• B)Investments with higher volatility should have a higher risk premium and therefore higher returns.
• C)Volatility seems to be a reasonable measure of risk when evaluating returns on large portfolios and the returns of individual securities.
• D)Riskier investments must offer investors higher average returns to compensate them for the extra risk they are taking on.

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Definitions:

Cerebral Cortex

The outer layer of the cerebrum in the brain, involved in various high-level brain functions such as sensation, voluntary muscle movement, thought, reasoning, and memory.

Voluntarily Move

The action of moving muscles at will, involving conscious control, primarily managed by the nervous system.

Sensations

Perceptions or feelings that result from the stimulation of the sensory organs.

Heart Stops

A critical condition where the heart ceases to beat, resulting in a sudden stop of blood circulation; also known as cardiac arrest.