Which of the Following Statements Is FALSE

question 2

Multiple Choice

Which of the following statements is FALSE?

• A) The Sharpe ratio if the portfolio tells us how much our expected return will increase for a given increase in volatility.
• B) We should continue to trade securities until the expected return of each security equals its required return.
• C) The required return is the expected return that is necessary to compensate for the risk that an investment will contribute to the portfolio.
• D) If security i's required return exceeds its expected return, then adding more of it will improve the performance of the portfolio.

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Definitions:

Stranger Anxiety

A developmental phase in infants and young children where they express fear or distress around unfamiliar people.

Social Referencing

The process by which individuals look to others for cues on how to react or behave in uncertain situations.

Check

The act of verifying or ensuring the accuracy, completeness, or quality of something.

Strange Situation

A structured observational technique used by psychologists to assess patterns of attachment in children.