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:

Human Immunodeficiency Virus

A virus that attacks the body's immune system and can lead to acquired immunodeficiency syndrome (AIDS) if not treated.

AIDS

Acquired Immune Deficiency Syndrome, a life-threatening condition caused by the human immunodeficiency virus (HIV), leading to a severely weakened immune system.

Necrophilia

A paraphilic disorder characterized by a sexual attraction to corpses.

Paraphilias

Sexual arousal from fantasies, behaviors, or urges involving nonhuman objects, the suffering of self or others, and/or nonconsenting persons.