Which of the Following Statements Is False

question 8

Multiple Choice

Which of the following statements is false?

• A) Rather than relying on the efficiency of a single portfolio (such as the market), multifactor models rely on the weaker condition that an efficient portfolio can be constructed from a collection of well-diversified portfolios or factors.
• B) A positive alpha in a single factor model means that the portfolios that implement the trading strategy capture risk that is not captured by the market portfolio.
• C) Multifactor models have a distinct advantage over single-factor models in that it is much easier to identify a collection of portfolios that captures systematic risk than just a single portfolio.
• D) Trading strategies based on market capitalization, book-to-market ratios, and momentum have been developed that appear to have zero alphas.

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Definitions:

Pull Strategies

Marketing strategies aimed at creating demand among consumers first, encouraging them to actively seek out a product or brand, which in turn prompts retailers to stock it.

Push Strategies

Marketing strategies that involve "pushing" products towards consumers by ensuring visibility in distribution channels.

Tracking

Includes monitoring key indicators, such as daily or weekly sales volume, while the advertisement is running to shed light on any problems with the message or the medium.

Deceptive Practices

Unethical or fraudulent activities designed to deceive or mislead consumers, often for financial gain or competitive advantage.