Which of the Following Statements Is False

question 4

Multiple Choice

Which of the following statements is false?

• A) To improve the performance of their portfolios, investors who are holding the market portfolio will compare the expected return of each security with its required return from the security market line.
• B) The Sharpe ratio of a portfolio will increase if we sell stocks with positive alphas.
• C) When a stock's alpha is not zero, investors can improve upon the performance of the market portfolio.
• D) When the market portfolio is efficient, all stocks are on the security market line and have an alpha of zero.

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Definitions:

Productivity Increases

The improvement in the efficiency of production processes, leading to more output from the same amount of inputs.

Measurable Cost Reductions

Specific decreases in expenses that can be quantified and attributed to specific actions or initiatives.

Employee Assistance

Programs and services provided by employers to help employees deal with personal problems that might adversely impact their work performance, health, and well-being.

Marital Problems

Issues and conflicts that arise within a marriage, potentially affecting the relationship’s stability and longevity.