Which of the Following Statements Is FALSE

question 50

Multiple Choice

Which of the following statements is FALSE?

• A)If the market portfolio is efficient,then all securities and portfolios must plot on the SML,not just individual stocks.
• B)For most stocks the standard errors of the alpha estimates are large,so it is impossible to conclude that the alphas are statistically different from zero.
• C)It is not difficult to find individual stocks that,in the past,have not plotted on the SML.
• D)Small stocks (those with lower market capitalization)have lower average returns.

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Definitions:

Patent Protection

Legal exclusivity granted to an inventor or assignee for a limited period in exchange for the public disclosure of an invention.

Easement

A legal right to use another's land for a specific limited purpose.

Adverse Possession

A legal principle allowing a person to claim ownership of land or property owned by another if they openly occupy and use it for a certain period.

Profit

The financial gain obtained when the amount earned from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity.