Which of the Following Statements Is FALSE

question 78

Multiple Choice

Which of the following statements is FALSE?

• A)Securities that tend to move more than the market have betas lower than 0.
• B)Securities whose returns tend to move in tandem with the market on average have a beta of 1.
• C)Beta corresponds to the slope of the best-fitting line in the plot of the securities excess returns versus the market excess return.
• D)The statistical technique that identifies the best-fitting line through a set of points is called linear regression.

---

Definitions:

Prepaid Expenses

Assets representing payments made in advance for goods or services to be received in the future.

Total Current Assets

The sum of all assets that are expected to be converted into cash, sold, or consumed within one year or within the normal operating cycle of the business.

Receivables Turnover Ratio

A financial metric indicating how efficiently a company collects its receivables, calculated by dividing net credit sales by the average accounts receivable.

Credit-Granting Policies

Guidelines established by lenders to determine the criteria and conditions under which credit is extended to borrowers.