Which of the Following Statements Is False

question 8

Multiple Choice

Which of the following statements is false?

• A) Rather than relying on the efficiency of a single portfolio (such as the market), multifactor models rely on the weaker condition that an efficient portfolio can be constructed from a collection of well-diversified portfolios or factors.
• B) A positive alpha in a single factor model means that the portfolios that implement the trading strategy capture risk that is not captured by the market portfolio.
• C) Multifactor models have a distinct advantage over single-factor models in that it is much easier to identify a collection of portfolios that captures systematic risk than just a single portfolio.
• D) Trading strategies based on market capitalization, book-to-market ratios, and momentum have been developed that appear to have zero alphas.

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Definitions:

Deep Tumors

Cancerous growths located deep within the body that may be hard to detect and treat.

Radiotherapy

A treatment method that uses high doses of radiation to kill cancer cells or shrink tumors.

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The process by which cells divide and multiply, creating new cells from existing ones.

Therapeutically

Pertaining to the treatment, alleviation, or prevention of disease; aimed at healing or providing therapy.