Which of the Following Statements Is FALSE

question 56

Multiple Choice

Which of the following statements is FALSE?

• A)All investors should demand the same efficient portfolio of securities in the same proportions.
• B)The Capital Asset Pricing Model (CAPM)allows corporate executives to identify the efficient portfolio (of risky assets)by using knowledge of the expected return of each security.
• C)If investors hold the efficient portfolio,then the cost of capital for any investment project is equal to its required return calculated using its beta with the efficient portfolio.
• D)The CAPM identifies the market portfolio as the efficient portfolio.

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Definitions:

Bell-Shaped Distribution

Another term for the normal distribution, which is symmetric and has its highest point at the mean, decreasing in height as it moves away from the mean.

Silicon Valley

A region in California known as a global center for high technology, innovation, and social media, home to many startups and global tech companies.

NeXT Computer

A technology company founded by Steve Jobs in 1985, known for its innovative computers and software development until it was acquired by Apple Inc. in 1996.

Eastern European

Relating to the eastern part of the European continent, which includes countries such as Poland, Hungary, and Romania, among others.