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Which of the Following Statements Is False

Question 97

Multiple Choice

Which of the following statements is false?


A) The Sharpe ratio of the portfolio tells us how much our expected return will increase for a given increase in volatility.
B) We should continue to trade securities until the expected return of each security equals its required return.
C) The required return is the expected return that is necessary to compensate for the risk that an investment will contribute to the portfolio.
D) If security i's required return exceeds its expected return, then adding more of it will improve the performance of the portfolio.

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