Which of the Following Statements Is False

question 33

Multiple Choice

Which of the following statements is false?

• A) Over the years since the discovery of the CAPM, it has become increasingly clear to researchers and practitioners alike that by forming portfolios based on market capitalization, book-to-market ratios, and past returns, one can construct trading strategies that have a positive alpha.
• B) Momentum trading strategy is to form portfolios based on market capitalization, book-to-market ratios, and past returns, and by doing so one can construct trading strategies that have a positive alpha.
• C) Over the years since the discovery of the CAPM, it has become increasingly clear to researchers and practitioners alike that by forming portfolios based on market capitalization, book-to-market ratios, and past returns, one can construct trading strategies that have a negative alpha.
• D) Over the years since the discovery of the CAPM, momentum trading strategy has been developed by forming portfolios based on market capitalization, book-to-market ratios, and past returns. By using such a strategy, one can construct trading strategies that have a positive alpha.

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Definitions:

Realistic Conflict Theory

A theory suggesting that intergroup conflicts arise when groups are in competition for limited resources.

In-Group

A social group to which an individual feels they belong, often characterized by a strong sense of identity and loyalty.

Out-Group

A social group toward which a person feels a sense of competition or opposition.

Social Identity Theory

A psychological theory that explains how individuals categorize themselves and others into groups, leading to identification with one's own group and discrimination against others.