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Which of the Following Statements Is FALSE

Question 35

Multiple Choice

Which of the following statements is FALSE?


A) A value-weighted portfolio is an equal-ownership portfolio: We hold an equal fraction of the total number of shares outstanding of each security in the portfolio.
B) When buying a value-weighted portfolio,we end up purchasing the same percentage of shares of each firm.
C) To maintain a value-weighted portfolio,we do not need to trade securities and rebalance the portfolio unless the number of shares outstanding of some security changes.
D) In a value-weighted portfolio the fraction of money invested in any security corresponds to its share of the total number of shares outstanding of all securities in the portfolio.

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