Which of the Following Statements Is False

question 25

Multiple Choice

Which of the following statements is false?

• A) If the CAPM correctly computes the risk premium, investors would stop investing only when they expected the alpha of an investment strategy to be negative.
• B) If the CAPM correctly computes the risk premium, an investment opportunity with a positive alpha is a positive NPV investment opportunity.
• C) If the CAPM correctly computes the risk premium, investors should flock to invest in positive alpha stocks.
• D) Anyone can implement a momentum trading strategy and therefore generate a positive investment opportunity.

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Definitions:

Competitive Advantages

Unique attributes or abilities that allow an organization to outperform its competitors, including quality, price, brand, and location.

Projected Changes

Anticipated or forecasted modifications in a specific area, such as technology, market trends, or regulatory environments.

Chili Market

Refers to the specific market segment dealing with the buying, selling, and distribution of chili peppers and related products.

Americanized Chili

A version of chili con carne that has been adapted to suit the tastes and ingredients commonly available in the United States.