Which of the Following Statements Is False

question 45

Multiple Choice

Which of the following statements is false?

• A) A significant fraction of investors might care about aspects of their portfolios other than expected return and volatility, and so would be unwilling to hold inefficient investment portfolios.
• B) Although the true market portfolio of all invested wealth might be efficient, the proxy portfolio might not track the actual market very well.
• C) We might be using the wrong proxy portfolio when we calculate alphas.
• D) The true market portfolio consists of all traded investment wealth in the economy.

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Definitions:

Probability Value

A measure that indicates the likelihood of the occurrence of a given event or the significance of results obtained in a statistical hypothesis testing.

Statistical Tests

Mathematical procedures used in statistics to assess hypotheses or make inferences based on sample data.

Chance Fluctuation

Random variations or changes that occur without a specific cause or pattern, often used in statistical analysis.

Correlation Coefficients

Correlation coefficients are statistical measures that quantify the degree to which two variables are related or move together, indicating the strength and direction of their relationship.