Which of the Following Statements Is False

question 64

Multiple Choice

Which of the following statements is false?

• A) A portfolio that consists of a long position in the risk-free investment is known as a levered portfolio.
• B) The optimal portfolio will not depend on the investor's personal tradeoff between risk and return.
• C) The volatility of the risk-free investment is zero.
• D) Our total volatility is only a fraction of the volatility of the efficient portfolio, based on the amount we invest in the risk free asset.

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Definitions:

Complex Response

An intricate or multifaceted reaction to stimuli, often involving multiple cognitive and emotional processes.

Shaping

A method of teaching complex behaviors by rewarding closer approximations to the desired behavior.

Operant Conditioning

A learning process in which the strength of a behavior is modified by the behavior's consequences, such as reward or punishment.

Premack Principle

A principle in psychology which states that more probable behaviors will reinforce less probable behaviors.