Which of the Following Statements Is False

question 44

Multiple Choice

Which of the following statements is false?

• A) A portfolio costs nothing to construct is called a self-financing portfolio.
• B) The most obvious portfolio to use in a multifactor model is the market portfolio itself.
• C) In general, a self-financing portfolio is any portfolio with portfolio weights that sum to one rather than zero.
• D) We can construct a self-financing portfolio by going long some stocks, and going short other stocks with equal market value.

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Definitions:

Bank

A financial institution licensed to receive deposits, offer loans, and provide various financial services to individuals and businesses.

Negotiable Instruments

Financial documents that guarantee the payment of a specified sum of money, either on-demand or at a set time.

Uniform Commercial Code

A comprehensive set of laws governing all commercial transactions in the United States, intended to standardize statutes across the states to facilitate easier interstate commerce.

World Trade Organization

An international organization that regulates international trade between nations, aiming to ensure that trade flows as smoothly, predictably, and freely as possible.