Which of the Following Statements Is FALSE

question 41

Multiple Choice

Which of the following statements is FALSE?

• A)A market index reports the value of a particular portfolio of securities.
• B)The S&P 500 is the standard portfolio used to represent "the market" when using the CAPM in practice.
• C)Even though the S&P 500 includes only 500 of the more than 7,000 individual U.S.Stocks in existence,it represents more than 70% of the U.S.stock market in terms of market capitalization.
• D)The S&P 500 is an equal-weighted portfolio of 500 of the largest U.S.stocks.

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Definitions:

Common Stock

A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's profits or losses.

Dividend Payments

Cash payments made by a company to its shareholders, usually derived from the company's profits.

Financing Activities

Transactions related to raising capital, repaying investors, and restructuring company debt within a business's cash flow statement.

Long-Term Debt

Borrowed money that is due for repayment more than one year into the future.