Which of the Following Statements Is False

question 1

Multiple Choice

Which of the following statements is false?

• A) Because very little trading is required to maintain it, an equal-weighted portfolio is called a passive portfolio.
• B) If the number of shares in a value-weighted portfolio does not change, but only the prices change, the portfolio will remain value-weighted.
• C) The CAPM says that individual investors should hold the market portfolio, a value-weighted portfolio of all risky securities in the market.
• D) A price-weighted portfolio holds an equal number of shares of each stock, independent of their size.

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Definitions:

Direct Competition

Companies or businesses that offer the same or similar products or services to the same customer or market segment.

Lower Prices

A strategy or condition where goods or services are offered for sale at reduced costs.

Bargaining Power of Suppliers

The ability of suppliers to influence the terms and conditions of the materials and goods they supply, affecting the buying company's costs and quality of inputs.

Degree of Rivalry

The intensity of competition among firms within the same industry or market.