Which of the Following Statements Is False

question 91

Multiple Choice

Which of the following statements is false?

• A) We say a portfolio is an efficient portfolio whenever it is possible to find another portfolio that is better in terms of both expected return and volatility.
• B) We can rule out inefficient portfolios because they represent inferior investment choices.
• C) The volatility of the portfolio will differ, depending on the correlation between the securities in the portfolio.
• D) Correlation has no effect on the expected return on a portfolio.

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Definitions:

Salvaging Fixed Assets

The process of recovering value from fixed assets that are no longer usable in their intended capacity, often through sale or recycling.

Discount Rate

Within discounted cash flow analysis, it is the interest rate used to determine the present value of cash flows anticipated in the future.

Initial Investment

Initial Investment is the amount of money used to start a project, purchase an asset, or invest in a financial product, prior to generating any returns.

Cash Inflows

This term describes the movement of money into a business or entity, typically from operations, investments, or financing activities.