Which of the Following Statements Is FALSE

question 35

Multiple Choice

Which of the following statements is FALSE?

• A)Margin investing is a risky investment strategy.
• B)Because our return on the risk-free investments is fixed and does not move with (or against)our portfolio,the correlation between the risk-free investment and the portfolio is always equal to one.
• C)Short selling the risk-free investment is equivalent to borrowing money at the risk-free interest rate through a standard loan.
• D)Margin investing can provide higher expected returns than investing in the efficient portfolio using only the funds we have available.

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Definitions:

Management Accounting System

A framework used by organizations to provide financial and non-financial information to managers for decision-making, planning, and control purposes.

Management Accountant

A professional who focuses on providing financial data and analysis to managers within an organization to aid in decision-making.

Computer Technology

The use of computers and software to perform tasks, manage data, and solve problems in various fields including business, science, and engineering.

Operational Tasks

Activities involved in the day-to-day operations of a business, focusing on the production, delivery, and support of products and services.