Which of the Following Statements Is False

question 72

Multiple Choice

Which of the following statements is false?

• A) Because diversification improves with the number of stocks held in a portfolio, an efficient portfolio should be a large portfolio containing many different stocks.
• B) The beta of a security is the sensitivity of the security's return to the return of the overall market.
• C) An efficient portfolio cannot be diversified further; that is, there is no way to reduce the risk of the portfolio without lowering its expected return.
• D) We call a portfolio that contains only unsystematic risk an efficient portfolio.

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Definitions:

Accepting Suggestions

The willingness to consider or adopt new ideas or recommendations from others.

Negotiating Conflict

The process of resolving disagreements or disputes through discussion, compromise, or other strategies to achieve a mutually acceptable outcome.

Fulfilling Commitments

The act of meeting the obligations or promises made to others in a timely and satisfactory manner.

Global World

A term reflecting the interconnectedness and interdependence of countries, economies, and cultures in today's modern landscape.