Which of the Following Statements Is False

question 31

Multiple Choice

Which of the following statements is false?

• A) A portfolio that costs nothing to construct is called a self-financing portfolio.
• B) The most obvious portfolio to use in a multifactor model is the market portfolio itself.
• C) In general, a self-financing portfolio is any portfolio with portfolio weights that sum to one rather than zero.
• D) We can construct a self-financing portfolio by going long on stocks, and going short on other stocks with equal market value.

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Definitions:

Quick Ratio

A measure of a company's ability to meet its short-term obligations using its most liquid assets, excluding inventory.

Product Warranty Expense

Costs that a company anticipates or incurs for repairing, replacing, or compensating for defective products during the warranty period.

Sales Price

The amount a customer pays to purchase a product or service.

Replacement Warranty

A guarantee provided by a seller or manufacturer to repair or replace defective goods within a certain period after purchase.