Which of the Following Statements Is FALSE

question 65

Multiple Choice

Which of the following statements is FALSE?

• A) We refer to the beta of a security with the market portfolio simply as the securities beta.
• B) There is a linear relationship between a share's beta and its expected return.
• C) A security with a negative beta has a negative correlation with the market, which means that this security tends to perform well when the rest of the market is doing poorly.
• D) The risk premium of a security is equal to the market risk premium (the amount by which the market's expected return exceeds the risk-free rate) divided by the amount of market risk present in the security's returns measured by its beta with the market.

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Definitions:

Nazis

Members of the National Socialist German Workers' Party, a far-right political party in Germany led by Adolf Hitler from 1920 to 1945, responsible for the Holocaust and World War II atrocities.

Attitude

A settled way of thinking or feeling about someone or something, typically reflected in a person's behavior.

Explicit

Information or content that is stated clearly and in detail, leaving no room for confusion or interpretation.

Implicit

Implied or understood though not directly expressed; involving attitudes, beliefs, or reactions that are automatic and unconscious.