Which of the Following Statements Is FALSE

question 64

Multiple Choice

Which of the following statements is FALSE?

• A) If indeed alphas are positive, it is possible that the positive alpha trading strategies contain risk that investors are unwilling to bear but the CAPM does not capture.
• B) If indeed alphas are positive, it is possible that the costs of implementing investment strategies are larger than the NPVs of undertaking them.
• C) If indeed alphas are positive, then investors have to be systematically ignoring negative-NPV investments opportunities.
• D) The only way a positive NPV investment opportunity can exist in a market is if some barrier to entry restricts competition.