Which of the Following Statements Is FALSE

question 42

Multiple Choice

Which of the following statements is FALSE?

• A)A portfolio costs nothing to construct is called a self-financing portfolio.
• B)The most obvious portfolio to use in a multifactor model is the market portfolio itself.
• C)In general,a self-financing portfolio is any portfolio with portfolio weights that sum to one rather than zero.
• D)We can construct a self-financing portfolio by going long some stocks,and going short other stocks with equal market value.

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Definitions:

Net Income

Net Income is the total profit of a company after all expenses and taxes have been deducted from revenue.

Variable Costs

Costs that vary in proportion to the level of production or business activity.

Fixed Costs

Expenses that do not change with the amount of goods or services produced over a short period.

Variable Costs

Costs that vary directly with the level of production or service provision.