Which of the Following Statements Is FALSE

question 74

Multiple Choice

Which of the following statements is FALSE?

• A)If we increase the fraction invested in the efficient portfolio beyond 100%,we are short selling the risk-free investment.
• B)As we increase the fraction invested in the efficient portfolio,we increase our risk premium but not our risk proportionately.
• C)To earn the highest possible expected return for any level of volatility we must find the portfolio that generates the steepest possible line when combined with the risk-free investment.
• D)Every investor should invest in the tangent portfolio independent of his or her taste for risk.

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Definitions:

Transmission

The act or process by which something is conveyed or carried from one place or person to another.

Shared Knowledge

Information, ideas, or understanding that is common to a group of people and forms part of their collective consciousness or culture.

Generations

Groups of individuals, typically within a family, who are born and live around the same time, marking distinct stages in societal or familial development.

Collectivism

A cultural value that emphasizes the importance of the group or community over individual achievements or desires.