Which of the Following Statements Is FALSE

question 14

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)When the Capital Asset Pricing Model (CAPM)assumptions hold,choosing an optimal portfolio is relatively straightforward: it is the combination of the risk-free investment and the market portfolio.
• 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:

Task Times

The duration that is expected or has been historically required to complete specific tasks or operations.

Heuristic

A problem-solving approach that employs practical methods and shortcuts to produce solutions that are good enough under the given circumstances.