Which of the Following Statements Is FALSE

question 42

Multiple Choice

Which of the following statements is FALSE?

• A)A portfolio costs nothing to construct is called a self-financing portfolio.
• B)The most obvious portfolio to use in a multifactor model is the market portfolio itself.
• C)In general,a self-financing portfolio is any portfolio with portfolio weights that sum to one rather than zero.
• D)We can construct a self-financing portfolio by going long some stocks,and going short other stocks with equal market value.

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Definitions:

Shareholder Wealth

The total value of an individual's ownership stake in a publicly traded corporation, often measured in terms of stock price appreciation plus dividends received.

Sustainable Growth Rate

The highest speed at which a firm can increase its revenue, profits, and dividends without raising its financial borrowing.

External Financing

Funds raised from sources outside the organization, typically through borrowing or issuing equity.

Sales Growth

The percentage increase in sales over a specified period of time, indicating the health and success of a business.