Which of the Following Statements Is False

question 81

Multiple Choice

Which of the following statements is false?

• A) The Sharpe ratio of the portfolio tells us how much our expected return will increase for a given increase in volatility.
• B) We should continue to trade securities until the expected return of each security equals its required return.
• C) The required return is the expected return that is necessary to compensate for the risk that an investment will contribute to the portfolio.
• D) If security i's required return exceeds its expected return, then adding more of it will improve the performance of the portfolio.

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Definitions:

Canada Savings Bonds

Canadian government savings products that are available for a limited period each year and offer a guaranteed rate of interest.

Per Annum

A term used to represent an annual occurrence or an amount over the course of a year.

Cashing In

The process of selling or converting a financial asset or investment for cash.

Combined Equivalent Value

The total value derived from combining several financial instruments or calculations to understand their overall effect.