Which of the Following Statements Is FALSE

question 39

Multiple Choice

Which of the following statements is FALSE?

• A)The most important example of non-tradeable wealth is human capital.
• B)If investors have a significant amount of non-tradeable wealth,this wealth will be an important part of their portfolios,but will not be part of the market portfolio of tradeable securities.
• C)If the entire portfolio of investments is efficient,then just the tradeable part of the portfolio should be efficient also.
• D)Researchers have found evidence that the presence of human capital can explain at least part of the reason for the inefficiency of the most commonly used market proxies.

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Definitions:

Rational Decisions

The process of making choices that result in the optimal level of benefit or utility for an individual.

Advertising

The activity or profession of producing advertisements for commercial products or services, aiming to influence consumer behavior.

Behavioral Economics

explores how psychological, cognitive, emotional, cultural, and social factors affect economic decisions, challenging traditional economic theories that assume rational behavior.

Recognition Heuristic

A cognitive shortcut that involves making a decision based on the recognition of familiar names or entities instead of considering detailed information.