Which of the Following Statements Is FALSE

question 32

Multiple Choice

Which of the following statements is FALSE?

• A)Because of the higher and uncompensated risk involved,no investor should choose a portfolio with a negative alpha.
• B)Because the average portfolio of all investors is the market portfolio,the average alpha for all investors is zero.
• C)The market portfolio can be inefficient if a significant number of investors misinterpret information and believe they are earning a positive alpha when they are actually earning a negative alpha.
• D)If no investor earns a positive alpha,then no investor can earn a negative alpha,and the market portfolio must be efficient.

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Definitions:

Short-Term

Pertaining to a limited period of time, often used to describe memory or goals that are not meant to be retained or achieved over a long duration.

Expected Death

A death that occurs when it is anticipated due to a known cause, such as a terminal illness, allowing for preparations and goodbyes.

Expected Lingering Death

A death that is anticipated after a prolonged illness, where the timing and progression of the illness can be predicted to some extent.

Lupus

An autoimmune disease where the body's immune system attacks its own tissues, causing widespread inflammation and tissue damage in various parts of the body.