Which of the Following Statements Is FALSE

question 43

Multiple Choice

Which of the following statements is FALSE?

• A)Many practitioners prefer to use average industry betas rather than individual stock betas.
• B)When estimating beta by using past returns it is best to use the longest time horizon of returns available.
• C)The CAPM predicts that a security's expected return depends on its beta with regard to the market portfolio of all risky investments available to investors.
• D)If we use too short a time horizon when estimating beta,our estimate of beta will be unreliable.

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Definitions:

Manager

An individual responsible for directing and overseeing the work of a group of people in an organization.

Productivity

The measure of the effectiveness of a person, machine, factory, system, etc., in converting inputs into useful outputs.

Quantitative Measure

An evaluation tool that uses numerical data to assess performance or outcomes.

Efficiency

The ability to accomplish a task or produce a desired outcome with the least amount of waste, effort, or resources.