Which of the Following Statements Is FALSE

question 50

Multiple Choice

Which of the following statements is FALSE?

• A)If the market portfolio is efficient,then all securities and portfolios must plot on the SML,not just individual stocks.
• B)For most stocks the standard errors of the alpha estimates are large,so it is impossible to conclude that the alphas are statistically different from zero.
• C)It is not difficult to find individual stocks that,in the past,have not plotted on the SML.
• D)Small stocks (those with lower market capitalization)have lower average returns.

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Definitions:

Feasibility Study

An evaluation of the feasibility and likely effectiveness of a suggested plan or system.

Formal Document

An official paper or digital record that follows a set structure or format, often used for legal, academic, or professional purposes.

Written Description

A detailed portrayal or explanation of an item, concept, or process through text.

Business Plan

A strategic blueprint for a company outlining its business model, market analysis, financial projections, and operational strategies.