Which of the Following Statements Is False

question 12

Multiple Choice

Which of the following statements is false?

• A) If the CAPM correctly computed 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:

Main Idea

The central or most important thought, concept, or argument that is being conveyed in a text or discourse.

Request For Action

A directive or plea issued to prompt someone to take a specific action or make a decision.

Expression Of Appreciation

A statement or gesture showing gratitude or acknowledgment of others' efforts or achievements.

Straightforward Statement

A clear, direct, and unambiguous declaration that conveys information or expresses a point without complexity.