Consider Two Securities,A & B

question 76

Multiple Choice

Consider two securities,A & B.Suppose a third security,C,has the same cash flows as A and B combined.Given this information about securities A,B,& C,which of the following statements is incorrect?

• A) If the total price of A and B is cheaper than the price of C, then we could make a profit selling A and B and buying C.
• B) Price(C) = Price(A) + Price(B)
• C) Because security C is equivalent to the portfolio of A and B, by the law of one price they must have the same price.
• D) The relationship known as value additivity says that the value of a portfolio is equal to the sum of the values of its parts.

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Definitions:

Left Side Of The Abdomen

The left portion of the abdomen, housing important organs such as part of the stomach, the left kidney, the spleen, and portions of the colon.

Cisterna Chyli

A dilated sac at the lower end of the thoracic duct into which lymph from the intestinal trunk and two lumbar lymphatic trunks flow.

Thoracic Duct

The largest lymphatic vessel in the body which transports lymph and chyle from the lower and left side of the body to the bloodstream.

Lymphatic Ducts

Large vessels of the lymphatic system that drain lymph from various parts of the body back into the bloodstream.