Which of the Following Statements Is False

question 12

Multiple Choice

Which of the following statements is false?

• A) If the CAPM correctly computed the risk premium, investors would stop investing only when they expected the alpha of an investment strategy to be negative.
• B) If the CAPM correctly computes the risk premium, an investment opportunity with a positive alpha is a positive-NPV investment opportunity.
• C) If the CAPM correctly computes the risk premium, investors should flock to invest in positive alpha stocks.
• D) Anyone can implement a momentum trading strategy and therefore generate a positive investment opportunity.

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Definitions:

Right Hemisphere

The hemisphere that controls the left side of the body and, in most people, is specialized for visual-spatial perception.

Emotional Processing

The method by which individuals perceive, respond to, and manage emotions and emotional stimuli.

Sternberg's Theory

A conceptual framework proposed by Robert Sternberg that outlines different facets of human intelligence, creativity, and love.

Components of Love

Theory by psychologist Robert Sternberg that identifies three fundamental elements of love: intimacy, passion, and commitment, which combine to form different types of relationships.