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.