Which one of the following is NOT true?
A)The separation theorem states that the borrowing decision and investment decision are separate.
B)Investors should look at investments in terms of their prospective return, not their cost
C)The separation theorem states that you cannot separate your risk-free and stock investments.
D)The market portfolio is the tangent line that goes through the risk-free rate.

Question

Quizplus · Accepted Answer

The separation theorem actually states that risk-free and risky assets should be analyzed and chosen separately. Option A is true, B is a correct statement about investment analysis, and D is a correct statement about the capital asset pricing model.

Which One of the Following Is NOT True