Which of the Following Statements Is FALSE

question 33

Multiple Choice

Which of the following statements is FALSE?

• A) A portfolio is efficient if it has the highest possible Sharpe ratio; that is it is efficient if it provides the largest increase in expected return possible for a given increase in volatility.
• B) The required return for an investment is equal to a risk premium that is equal to the risk premium of the investor's current portfolio scaled by .
• C) Increasing the investment in investment I will increase the Sharpe ratio of portfolio P if its expected return E[R_i] exceeds the required return r_i, which is given by r_i = r_f + × (E[R_p] - r_f).
• D) If a security i's expected return is less than the required return r_i, we should reduce our holding of security i.

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Definitions:

Task Orientation

A focus on completing tasks and achieving specific outcomes, often prioritizing work and productivity.

Trait Approach

A perspective in psychology focused on the identification and measurement of specific personality traits.

Leadership Success

The effectiveness with which someone in a leadership position achieves desired outcomes and goals, often measured by organizational performance and team satisfaction.

Personal Characteristics

Features or qualities that define an individual's identity, such as traits, behaviors, and attitudes.