Which of the Following Statements Is False

question 10

Multiple Choice

Which of the following statements is false?

• A) All investors should demand the same efficient portfolio of securities in the same proportions.
• B) The Capital Asset Pricing Model (CAPM) allows corporate executives to identify the efficient portfolio (of risky assets) by using knowledge of the expected return of each security.
• C) If investors hold the efficient portfolio, then the cost of capital for any investment project is equal to its required return calculated using its beta with the efficient portfolio.
• D) The CAPM identifies the market portfolio as the efficient portfolio.

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Definitions:

Output Level

This refers to the quantity of goods or services produced by a firm or an economy within a specific period.

Monopolist

A market participant that has exclusive control over the supply of a particular commodity or service, allowing it to influence price and market conditions.

Profit Maximizing

The process or strategy of adjusting production and operational variables to achieve the highest possible profit.

Same Price

A condition where various sellers offer a product or service at an identical cost to consumers.