Which of the Following Statements Is FALSE

question 25

Multiple Choice

Which of the following statements is FALSE?

• A)When an investor chooses her optimal portfolio,she will do so by finding the tangent line using the risk-free rate that corresponds to her investment horizon.
• B)If the market portfolio is not efficient,savvy investors who recognize that the market portfolio is not optimal will push prices and expected returns back into balance.
• C)Even though different investors may research different stocks,their information will not impact the market portfolio since there is no way to share this information with other investors.
• D)In the real world,borrowers pay higher interest rates than savers receive.

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Definitions:

Reinforced

Strengthened or encouraged behavior as a result of receiving positive outcomes or avoiding negative consequences.

Negative Reinforcement

A process in behavior modification where a response is strengthened because an unfavorable condition is stopped or avoided.

Positive Reinforcement

A principle in behavioral psychology involving the introduction of a rewarding stimulus following a desired behavior, to increase the likelihood of that behavior occurring in the future.

Prescription Medication

Drugs that legally require a medical prescription to be dispensed.