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:

Truth-in-Lending Act

A legislation at the federal level aimed at encouraging the knowledgeable use of consumer credit through mandated disclosures regarding its conditions and expenses.

Reasonable Rate

A fair or acceptable price or cost for goods, services, or obligations, often influenced by market conditions or regulation.

Federal Reserve Board

The governing body of the Federal Reserve System, responsible for overseeing the United States' monetary policy and regulating banks.

Deceptive Trade Practices

Unfair business practices that mislead or deceive consumers, usually regulated by laws to protect consumer rights.