Which of the Following Statements Is False

question 44

Multiple Choice

Which of the following statements is false?

• A) Portfolios with high market capitalizations will have positive alphas if the market portfolio is not efficient.
• B) The size effect is the observation that firms with high book-to-market ratios have positive alphas.
• C) If the market portfolio is not efficient, then a portfolio of high book-to-market stocks will likely have positive alphas.
• D) Portfolios with low book-to-market ratios will have negative alphas if the market portfolio is not efficient.

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Definitions:

Mental Processes

Internal cognitive operations that include thinking, perceiving, and decision-making.

External Environment

All outside factors and influences that impact the operation and performance of an entity, including social, technological, economic, environmental, and political factors.

Physical Stimuli

External factors or changes in the environment that can produce a physical response in an organism.

Psychological Laboratory

A controlled environment where experiments are conducted to study various aspects of human behavior and mental processes.