Which of the Following Statements Is FALSE

question 6

Multiple Choice

Which of the following statements is FALSE?

• A) Because all investors should hold risky securities in the same proportions as the efficient portfolio, their combined portfolio will also reflect the same proportions as the efficient portfolio.
• B) The Capital Asset Pricing Model (CAPM) assumptions hold that the return on any portfolio is the combination of the risk-free rate of return plus a risk premium proportional to the amount of systematic risk in the investment.
• C) Graphically, when the tangent line goes through the market portfolio, it is called the security market line (SML).
• D) A portfolio's risk premium and volatility are determined by the fraction that is invested in the market.

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Definitions:

Patience

The capacity to accept or tolerate delay, problems, or suffering without becoming annoyed or anxious.

Planning

The process of making detailed strategies and arrangements for achieving specific goals or completing tasks.

Stakeholder Model

A framework used in business that identifies and addresses the interests and concerns of individuals and groups affected by the organization's actions.

Social Responsibility

The obligation of individuals and organizations to act in ways that benefit society at large, beyond their own interests or profits.