Which of the Following Statements Is FALSE

question 47

Multiple Choice

Which of the following statements is FALSE?

• A)Because diversification improves with the number of stocks held in a portfolio an efficient portfolio should be a large portfolio containing many different stocks.
• B)The beta of a security is the sensitivity of the security's return to the return of the overall market.
• C)An efficient portfolio cannot be diversified further,that is there is no way to reduce the risk of the portfolio without lowering its expected return.
• D)We call a portfolio that contains only unsystematic risk an efficient portfolio.

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Definitions:

Direct Method

A way of allocating service department costs directly to production departments without any consideration for services rendered between service departments.

Operating Activities

Activities that relate directly to the operation of the company, including production, sales, and day-to-day administrative functions.

Net Sales Adjusted

The revenue a company generates from its primary operations after deducting returns, allowances, and discounts.

Direct Method

A way of allocating service department costs directly to production departments without intermediate steps.