Which of the Following Statements Is False

question 17

Multiple Choice

Which of the following statements is false?

• A) If alphas are positive, it is possible that the positive alpha trading strategies contain risk that investors are unwilling to bear but that the CAPM does not capture.
• B) If alphas are positive, it is possible that the costs of implementing investment strategies are larger than the NPVs of undertaking them.
• C) If alphas are negative, then investors have to be systematically ignoring positive-NPV investment opportunities.
• D) The only way a positive-NPV investment opportunity can exist in a market is if some barrier to entry restricts competition.

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Definitions:

Methane

A simple hydrocarbon with the chemical formula CH4, known as the simplest alkane and a primary component of natural gas.

Presence

The existence or occurrence of a particular substance or entity within a specific environment or context.

Experimental Conditions

The specific settings, parameters, and environment under which scientific experiments are conducted.

Chloromethane

A colorless and highly flammable gas with a slightly sweet odor, used in chemical synthesis.