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:

Correspondence

Business letters sent to customers, coworkers, superiors, and subordinates.

Priority

Something that is regarded as more important than another and therefore needs to be dealt with first.

General-to-specific

A pattern of organization where information is presented from broad concepts to detailed points, often used in writing and speech.

Problem-solution

A text structure that presents a problem and offers one or more solutions for it.