Which of the Following Statements Is False

question 97

Multiple Choice

Which of the following statements is false?

• A) The beta of a security is the ratio of its volatility due to market risk to the volatility of the market as a whole.
• B) Under the CAPM assumptions, the market portfolio is efficient, so beta is the appropriate measure of risk to determine a security's risk premium.
• C) Under the CAPM assumptions, we can identify the efficient portfolio: it is equal to the market portfolio.
• D) We can determine the expected return for a security and the cost of capital of an investment opportunity by using the risk-free investment as a benchmark.

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Definitions:

Intrinsic Motivations

The drive to engage in an activity for its own sake, deriving pleasure and satisfaction from the activity itself rather than external rewards.

Self-actualization

represents the realization of an individual's potential, self-fulfillment, seeking personal growth, and peak experiences.

Homeostasis

The ability or tendency of an organism or cell to maintain internal equilibrium by adjusting its physiological processes.

Drive

A psychological state that, by creating arousal, motivates an organism to engage in a behavior to satisfy a need.