Which of the Following Statements Is FALSE

question 55

Multiple Choice

Which of the following statements is FALSE?

• A) If we increase the fraction invested in the efficient portfolio beyond 100%m we are short selling the risk-free investment.
• B) As we increase the fraction invested in the efficient portfolio, we increase our risk premium but not our risk proportionately.
• C) To earn the highest possible expected return for any level of volatility we must find the portfolio that generates the steepest possible line when combined with the risk-free investment.
• D) Every investor should invest in the tangent portfolio independent of his or her taste for risk.

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Definitions:

Structural Rearrangement

A process involving changes in the arrangement of atoms within a molecule, leading to the formation of a different structural isomer.

Cations

Positively charged ions that have more protons than electrons, resulting from the loss of one or more electrons.

Inversion

In chemistry, this refers to the process by which the spatial arrangement of atoms in a molecule is reversed.

Retention

The phenomenon where the configuration of a molecule remains unchanged during or after a chemical process.