Which of the Following Statements Is FALSE

question 45

Multiple Choice

Which of the following statements is FALSE?

• A)We say a portfolio is long those stocks that have negative portfolio weights.
• B)The efficient portfolios are those portfolios offering the highest possible expected return for a given level of volatility.
• C)When two stocks are perfectly negatively correlated,it becomes possible to hold a portfolio that bears absolutely no risk.
• D)The lower the correlation of the securities in a portfolio the lower the volatility we can obtain.

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Definitions:

Balance Theory

A psychological theory proposing that individuals strive for consistency among their beliefs, attitudes, and sentiments.

Balance Theory

A psychological theory suggesting that people strive for harmony and consistency in their relationships, attitudes, and beliefs, avoiding imbalance or discord.

Cognitive Consistency

A model of social cognition in which people try to reduce inconsistency among their cognitions, because they find inconsistency unpleasant.

Balance Theory

A psychological theory that suggests individuals strive for a harmonious balance in their relationships and beliefs, avoiding inconsistency among their thoughts.