Which of the Following Statements Is False

question 115

Multiple Choice

Which of the following statements is false?

• A) If we increase the fraction invested in the efficient portfolio beyond 100%m we are short selling the risk-free investment.
• B) As we increase the fraction invested in the efficient portfolio, we increase our risk premium but not our risk proportionately.
• C) To earn the highest possible expected return for any level of volatility we must find the portfolio that generates the steepest possible line when combined with the risk-free investment.
• D) Every investor should invest in the tangent portfolio independent of his or her taste for risk.

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Definitions:

Bronchi

The main passageways into the lungs, which branch from the trachea and further divide into smaller airways called bronchioles.

Oxygen

A chemical element with symbol O, critical for the survival of aerobic organisms as it is essential for energy production in respiration and is a component of water.

Hypothalamus

A region of the brain that regulates many bodily functions, including temperature, hunger, and thirst, as well as emotional and hormonal responses.

Cerebellum

The part of the brain located at the back of the skull, responsible for coordinating voluntary movements, balance, and posture.