Which of the Following Statements Is False

question 10

Multiple Choice

Which of the following statements is false?

• A) All investors should demand the same efficient portfolio of securities in the same proportions.
• B) The Capital Asset Pricing Model (CAPM) allows corporate executives to identify the efficient portfolio (of risky assets) by using knowledge of the expected return of each security.
• C) If investors hold the efficient portfolio, then the cost of capital for any investment project is equal to its required return calculated using its beta with the efficient portfolio.
• D) The CAPM identifies the market portfolio as the efficient portfolio.

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Definitions:

Electrolysis

A chemical process in which electrical current is passed through a substance to effect a chemical change, commonly used for metal plating and water splitting.

Moles

A mole is a unit of measurement in chemistry representing 6.022 x 10^23 particles of a substance, used to express the amount of a chemical substance.

Cupric Ions

Ions of copper in a +2 oxidation state, commonly involved in various biological and chemical processes.

Tchebysheff's Theorem

A statistical theorem that specifies the minimum proportion of observations within a certain number of standard deviations from the mean for any distribution shape.