Question
Which of the following statements is FALSE? A. When an investor chooses her optimal portfolio, she will do so by finding the tangent line using
Which of the following statements is FALSE?
A. When an investor chooses her optimal portfolio, she will do so by finding the tangent line using the risk-free rate that corresponds to her investment horizon.
B. Even though different investors may research different stocks, their information will not impact the market portfolio since there is no way to share this information with other investors.
C. In the real world, borrowers pay higher interest rates than savers receive.
D. If the market portfolio is not efficient, savvy investors who recognize that the market portfolio is not optimal will push prices and expected returns back into balance.
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