Which of the Following Statements Is FALSE

question 2

Multiple Choice

Which of the following statements is FALSE?

• A) The Sharpe ratio if the portfolio tells us how much our expected return will increase for a given increase in volatility.
• B) We should continue to trade securities until the expected return of each security equals its required return.
• C) The required return is the expected return that is necessary to compensate for the risk that an investment will contribute to the portfolio.
• D) If security i's required return exceeds its expected return, then adding more of it will improve the performance of the portfolio.

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Definitions:

Bailment

A legal relationship in common law where physical possession of personal property, or a chattel, is transferred from one person to another who subsequently has possession of the property.

Personal Property

Movable assets owned by an individual or corporation, excluding real estate.

Agreed-Upon Manner

pertains to a method or process that all involved parties have mutually accepted or consented to follow.

Supreme Court Of Alabama

The highest judicial authority in the state of Alabama, responsible for interpreting state laws and constitution.