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Which of the following statements is false? A. If investors have a high disagreement concerning the...

Which of the following statements is false?

A. If investors have a high disagreement concerning the value of a publicly traded firm, and it is also difficult to short sell the firm’s shares, then the firm’s stock might become overpriced.

B. During bubbles, the behavior of many investors appears irrational.

C. Most tests of technical analysis strongly suggest that past returns and other market generated data can be easily exploited to create portfolios that generate positive alphas.

D. Portfolios of high book/market stocks have historically outperformed portfolios of low book/market stocks.

E. Inadequacies associated with the CAPM should not be interpreted as the market being inefficient.

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Answer #1

Option E is correct

Inadequacies associated with the CAPM should not be interpreted as the market being inefficient.

Inadequacies of CAPM Model, is because of inefficiency in the market as CAPM Model considers market to be efficient.

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