Which of the Following Is NOT True Concerning the Index

question 31

Multiple Choice

Which of the following is NOT true concerning the index recommended for use in the CAPM?

• A) It should include both traded and untraded investments.
• B) The S&P 500 is the most common proxy for U.S. stocks.
• C) The S&P 500 and the MSCI World index will produce fairly similar results for U.S. stocks.
• D) For less developed countries, a local market index is recommended.

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Definitions:

Noticeable Effect

An observable or measurable impact resulting from a specific action or phenomenon.

Evolution Timescales

The long periods over which evolutionary processes such as mutation, selection, and drift act, ranging from thousands to billions of years.

Natural Selection

The process by which organisms that are better adapted to their environment tend to survive and produce more offspring, a key mechanism of evolution.

Beak Size

The physical measurement of the length or depth of a bird's beak, which can influence its ability to feed and mate.