Which of the Following Statements Is FALSE

question 63

Multiple Choice

Which of the following statements is FALSE?

• A)The market portfolio is the efficient portfolio.
• B)Many practitioners believe it is sensible to use the CAPM and the security market line as a practical means to estimate a stock's required return and therefore a firm's equity cost of capital.
• C)If we plot individual securities according to their expected return and beta,the CAPM implies that they should all fall along the CML.
• D)As savvy investors attempt to trade to improve their portfolios,they raise the price and lower the expected return of the positive alpha stocks,and they depress the price and raise the expected return of negative alpha stocks,until the stocks are once again on the security market line and the market portfolio is efficient.

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Definitions:

Product-Mix

The total range of products that a company offers to sell, including all its product lines, variants, and items.

New-Product Characteristic

Features or attributes that define a newly launched product, distinguishing it from existing products in the market.

Potential Customer's Needs

Represents the specific requirements or preferences of potential buyers that businesses aim to meet with their products or services.

Product Knowledge

The understanding of a product's features, benefits, applications, and uses, which is crucial for effective sales and marketing efforts.