Which of the Following Statements Is FALSE

question 24

Multiple Choice

Which of the following statements is FALSE?

• A)Beta differs from volatility.
• B)The risk premium investors can earn by holding the market portfolio is the difference between the market portfolio's expected return and the risk-free interest rate.
• C)Stocks in cyclical industries,in which revenues tend to vary greatly over the business cycle,are likely to be more sensitive to systematic risk and have higher betas than stocks in less sensitive industries.
• D)If we assume that the market portfolio (or the S&P 500)is efficient,then changes in the value of the market portfolio represent unsystematic shocks to the economy.

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Definitions:

Trusting

The act of believing in the reliability, truth, ability, or strength of someone or something without requiring constant proof or evidence.

Extraversion

A personality trait characterized by outgoing, talkative, and socially confident behaviors.

Outgoing

Characterized by an open, friendly, and socially confident behavior, often actively seeking social interaction.

Sociable

A personality trait or characteristic of someone who enjoys socializing and engaging in activities with others.