Which of the Following Statements Is False

question 32

Multiple Choice

Which of the following statements is false?

• A) If the market portfolio is efficient, then all securities and portfolios must plot on the SML, not just individual stocks.
• B) For most stocks the standard errors of the alpha estimates are large, so it is impossible to conclude that the alphas are statistically different from zero.
• C) It is not difficult to find individual stocks that, in the past, have not plotted on the SML.
• D) Small stocks (those with lower market capitalization) have lower average returns.

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Definitions:

Manufactured Object

An item or product that has been created or produced through a manufacturing process, typically involving machinery and human labor.

Toy

An object designed for children to play with, often aiding in learning and development through entertainment.

Ball

A round object typically used in games and sports, which can vary in size, material, and design.

Classification

The action or process of categorizing objects, organisms, or ideas based on shared qualities or characteristics.