Which of the Following Statements Is False

question 16

Multiple Choice

Which of the following statements is false?

• A) A value-weighted portfolio is an equal-ownership portfolio: We hold an equal fraction of the total number of shares outstanding of each security in the portfolio.
• B) When buying a value-weighted portfolio, we end up purchasing the same percentage of shares of each firm.
• C) To maintain a value-weighted portfolio, we do not need to trade securities and rebalance the portfolio unless the number of shares outstanding of some security changes.
• D) In a value weighted portfolio the fraction of money invested in any security corresponds to its share of the total number of shares outstanding of all securities in the portfolio.

---

Definitions:

Proportional Tax

A tax system where the rate of taxation is the same for all taxpayers, regardless of income or wealth.

Payroll Tax

Duties levied on both employers and employees, usually reflecting a portion of the payroll expenses.

Per-hour Wage

The sum of money an employee receives for working one hour.

Payroll Tax

Fees assessed on employers and their employees, calculated frequently as a fraction of the salaries employees earn.