Which of the Following Statements Is FALSE

question 54

Multiple Choice

Which of the following statements is FALSE?

• A)Because very little trading is required to maintain it,an equal-weighted portfolio is called a passive portfolio.
• B)If the number of shares in a value-weighted portfolio does not change,but only the prices change,the portfolio will remain value-weighted.
• C)The CAPM says that individual investors should hold the market portfolio,a value-weighted portfolio of all risky securities in the market.
• D)A price-weighted portfolio holds an equal number of shares of each stock,independent of their size.

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Definitions:

Financial Assets

Resources having economic value that are held by an individual or corporation, primarily including stocks, bonds, and cash equivalents.

Entrepreneur

A profit-seeking decision maker who starts with an idea, organizes an enterprise to bring that idea to life, and assumes the risk of the operation

Profit

Reward for entrepreneurial ability; sales revenue minus resource cost.

Tangible

Refers to physical assets or goods that can be seen, touched, and valued, as opposed to intangible assets like intellectual property.