Which of the Following Statements Is False

question 54

Multiple Choice

Which of the following statements is false?

• A) The size effect is the observation that small stocks have positive alphas.
• B) When considering portfolios formed based on the market-to-book ratio, most of the portfolios plot below the security market line.
• C) The largest alphas occur in the smallest size deciles.
• D) When considering portfolios formed based on size, although the portfolios with the higher betas yield higher returns, most size portfolios plot above the security market line.

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Definitions:

Subliminal Stimulation

A sensory stimulus that is below an individual's threshold for conscious perception but can still influence behavior or thought.

Pupil Contraction

The process by which the pupil decreases in size to limit the amount of light entering the eye.

James-Lange Theory

A theory of emotion proposing that emotions occur as a result of physiological reactions to events. According to this theory, we feel emotion because of biological changes caused by stress.

Spillover Effect

The phenomenon where an individual's emotions or behaviors in one area influence another aspect of their life or another individual's emotional state.