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.

---

Definitions:

Editing Group

A collection of individuals collaborating on modifying and improving a document or set of documents.

Home Tab

The primary tab in most software applications that contains the most frequently used commands and tools.

Footer

The bottom section of a document or webpage that can contain additional information like page numbers, copyright details, or contact information.

Dark Background

A visual design choice involving a darker color palette for the backdrop of a webpage, document, or user interface, often for aesthetic reasons or to reduce eye strain.