Assume the Beta for the Stock Market in General Is

question 74

Multiple Choice

Assume the beta for the stock market in general is 1.0 and that the beta for World-Wide Television Productions is 2.4.Which of these statements is not true?

• A)The average stock is less risky than World-Wide Television Productions stock.
• B)World-Wide Television Productions stock is more risky than the average stock.
• C)Beta compares the risk of a specific stock issue with the risk of the stock market in general.
• D)Most stocks have betas between 0.5 and 2.
• E)World-Wide Television Productions stock is less risky than the average stock.

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Definitions:

IFRS

A collection of accounting standards known as International Financial Reporting Standards, developed by the International Accounting Standards Board, which directs the global preparation of financial statements.

Selling Goods

The act of transferring physical products or merchandise to a buyer in exchange for money or other compensation.

Cookie Jar Reserves

An accounting practice where companies store reserves in good years to smooth out earnings by releasing them in bad years, which can be seen as deceptive.

GAAP

The standard set of guidelines for financial accounting that is widely accepted and used within a certain jurisdiction, known as Generally Accepted Accounting Principles.