Which of the following statements is FALSE?
A)When stocks are perfectly positively correlated,the set of portfolios is identified graphically by a straight line between them.
B)An investor seeking high returns and low volatility should only invest in an efficient portfolio.
C)When the correlation between securities is less than 1,the volatility of the portfolio is reduced due to diversification.
D)Efficient portfolios can be easily ranked,because investors will choose from among those with the highest expected returns.

Question

Quizplus · Accepted Answer

Efficient portfolios cannot be easily ranked solely based on expected returns, as investors must also consider the level of risk they are willing to take on. The ranking of efficient portfolios will vary depending on an investor's risk tolerance.

Which of the Following Statements Is FALSE