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:

"Shoulds"

Cognitive distortions characterized by beliefs about how one or others ought to behave, which can often lead to feelings of guilt or shame.

Difficult Feelings

Emotional experiences that are challenging to face or manage, such as sadness, anger, guilt, or anxiety.

Emergent Strategy

A strategy that develops over time in an organization in the absence of specific intentions, often in response to unexpected opportunities or challenges.

Unrealized Strategy

Plans or ambitions that have not been achieved or put into effect, especially in business or organizational contexts.