Which of the Following Statements Is False

question 7

Multiple Choice

Which of the following statements is false?

• A) The market portfolio contains more of the smallest stocks and less of the larger stocks.
• B) For the market portfolio, the investment in each security is proportional to its market capitalization.
• C) Because the market portfolio is defined as the total supply of securities, the proportions should correspond exactly to the proportion of the total market that each security represents.
• D) Market capitalization is the total market value of the outstanding shares of a firm.

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