Which of the Following Statements Is False

question 1

Multiple Choice

Which of the following statements is false?

• A) As a practical matter, it is extremely difficult to identify portfolios that are efficient because we cannot measure the expected return and the standard deviation of a portfolio with great accuracy.
• B) The portfolios in a multifactor model can be thought of as either risk factors themselves or portfolios of stocks correlated with unobservable risk factors.
• C) Each factor beta is the expected percent change in the excess return of a security for a 1% change in the excess return of the factor portfolio.
• D) Even if the market portfolio is not efficient, it still must capture all components of systematic risk.

Distinguish between explicit and implicit costs in decision-making.

Understand the reasons behind the purchase of insurance and its relation to risk aversion.

Identify the scenarios where individuals might make decisions that are not economically optimal due to irrational behaviors or misperceptions.

Understand the developmental stages of children's cognition and memory.

---

Definitions:

Lewis Structure

A diagram that represents the valence electrons of atoms within a molecule, illustrating the bonding between atoms and the existence of lone pairs of electrons.

Acetic Acid

A weak, organic acid that gives vinegar its characteristic smell and sour taste; used as a chemical reagent.

Lone Pairs

Electron pairs in the outer shell of an atom that are not involved in chemical bonding.

Orbital

An equation that represents the wave-like actions of one or two electrons in an atomic structure.