Which of the Following Statements Is FALSE

question 84

Multiple Choice

Which of the following statements is FALSE?

• A)One difficulty when trying to estimate beta for a security is that beta depends on the correlation and volatilities of the future returns of the security and the market.
• B)It is common practice to estimate beta based on the expectations of future correlations and volatilities.
• C)One difficulty when trying to estimate beta for a security is that beta depends on investors' expectations of the correlation and volatilities of the security's and market's returns.
• D)Securities that tend to move less than the market have betas below 1.

---

Definitions:

Duopolists

Two firms that dominate a particular market or industry, competing directly with each other.

McDonald's Franchise

A business agreement allowing individuals to open and operate a McDonald's restaurant, utilizing the company's branding, procedures, and resources in exchange for fees and adherence to corporate policies.

Demand for Hamburgers

The quantity of hamburgers that consumers are willing and able to purchase at various prices, within a specific time frame.

Sherman Antitrust Act

A landmark federal statute in the United States passed in 1890 that prohibits monopolistic business practices and promotes competition.