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Which of the following statements is FALSE? A. In theory, the market portfolio includes all risky assets that are available to investors. B. The beta

Which of the following statements is FALSE?

A. In theory, the market portfolio includes all risky assets that are available to investors.

B. The beta of the market portfolio is 1.

C. Based on the CAPM, if the beta of stock A is larger the beta of Stock B, then the required risk premium for Stock A must be larger than that for Stock B.

D. Utility firms such as Xcel Energy are less sensitive to fluctuations in the overall market than firms in the cyclical industries. Therefore, they tend to have higher betas than these firms in the cyclical industries.

E. None of the above

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