Which of the Following Statements Is False

question 7

Multiple Choice

Which of the following statements is false?

• A) When stocks are perfectly positively correlated, the set of portfolios is identified graphically by a straight line between them.
• B) An investor seeking high returns and low volatility should only invest in an efficient portfolio.
• C) When the correlation between securities is less than 1, the volatility of the portfolio is reduced due to diversification.
• D) Efficient portfolios can be easily ranked, because investors will choose from among them those with the highest expected returns.

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Definitions:

Hidden Costs

Expenses that are not obvious at the initial stage but emerge during the process or lifecycle of a project, product, or service.

Cash Flow

The total amount of money being transferred into and out of a business, affecting its liquidity, operations, and financial health.

Product Flow

The movement of goods from the place of production to the point of sale and finally to the end-consumer, encompassing the entire supply chain process.

Information Flow

Information flow refers to the way information moves through an organization or system, facilitating decision-making and coordination.