Which of the following statements is false? a) we say a portfolio is an efficient portfolio whenever it is possible to find another portfolio that is better in terms of both expected return and volatility. b) we can rule out inefficient portfolios because they represent inferior investment choices. c) the volatility of the portfolio will differ, depending on the correlation between the securities in the portfolio. d) correlation has no effect on the expected return on a portfolio.

The false statement is letter "A": We say a portfolio is an efficient portfolio whenever it is possible to find another portfolio that is better in terms of both expected return and volatility.

Explanation:

An effective portfolio is a portfolio with the highest expected revenue for a given risk level or a portfolio with the lowest risk level for a given expected revenue. When the portfolio has reached either one of the two points it is said that it has reached its efficient frontier.

In that case, option "A" is false since the portfolio efficiency has nothing to do with the similarity it may have with another one.

explanation:

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