Which of the Following Statements Is FALSE

question 16

Multiple Choice

Which of the following statements is FALSE?

• A)We should be suspicious of beta estimates that are extreme relative to industry norms.
• B)When using historical data,there is always the possibility of estimation error.
• C)Evidence suggests that betas tend to revert toward zero over time.
• D)For stocks,common practice is to use at least two years of weekly return data or five years of monthly return data when estimating beta.

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Definitions:

Costs More

Refers to an increase in financial expenditure or the necessity to spend more money on a specific item or service.

Indifference Schedule

A tabular representation showing combinations of goods between which a consumer is indifferent, reflecting similar preferences as an indifference map.

Units of X

A quantifiable amount of a product or resource, denoted as 'X', used in various contexts to measure output, consumption, or other economic variables.

Marginal Rate

refers to the rate at which one variable changes as another variable changes slightly, commonly used in the context of taxes or interest.