Which of the Following Statements Is False

question 75

Multiple Choice

Which of the following statements is false?

• A) The expected return of a portfolio should correspond to the portfolio's beta.
• B) Graphically the line through the risk-free investment and the market portfolio is called the capital market line (CML).
• C) The beta of a portfolio is the weighted average beta of the securities in the portfolio.
• D) By holding a negative beta security, an investor can reduce the overall market risk of her portfolio.

---

Definitions:

Precise Predictions

Specific forecasts made about the outcomes of scientific experiments or observations.

Stimulus-Response Models

A framework in behavioral psychology where a specific stimulus leads to a particular response, emphasizing the predictable link between stimuli and reactions.

Expectancy-Value Theory

A psychological theory that explains how the motivation to engage in a behavior is influenced by the individual's expectation of success and the value they place on the success.

Motivated Behaviors

Actions that are initiated, guided, and maintained to fulfill a need or to achieve a particular goal.