Which of the Following Statements Is FALSE

question 2

Multiple Choice

Which of the following statements is FALSE?

• A)The CAPM states that we should use the risk-free interest rate corresponding to the investment horizon of the firm's investors.
• B)To determine the risk premium for a stock using the security market line,we need an estimate of the market risk premium.
• C)Most financial analysts report using the yields of Treasury Bills to determine the risk-free rate when valuing a long-term investment with an indefinite horizon.
• D)The risk-free interest rate is generally determined using the yields of U.S.Treasury securities,which are free from default risk.

---

Definitions:

USMCA

The United States-Mexico-Canada Agreement, a free trade deal replacing NAFTA to facilitate fair trade among these North American countries.

NAFTA

The North American Free Trade Agreement (NAFTA) was a treaty entered into by the United States, Canada, and Mexico; it was designed to eliminate most tariffs on trade between these nations.

Trade Agreement

An agreement between two or more nations regarding the conditions of trade between them, often involving tariff reductions or other trade barriers.

Globalization

The process of interaction and integration among people, companies, and governments worldwide, often driven by international trade and investment and aided by information technology.