Which of the Following Statements Is FALSE

question 34

Multiple Choice

Which of the following statements is FALSE?

• A)The beta of a portfolio is the weighted average beta of the securities in the portfolio.
• B)The expected return of a portfolio should correspond to the portfolio's beta.
• C)By holding a negative-beta security, an investor can reduce the overall market risk of her portfolio.
• D)Graphically, the line through the risk-free investment and the market portfolio is called the capital market line (CML).

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