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.

Calculate the ending cash balance for a given period based on projected sales, expenses, and cash management policies.

Appreciate the role of credit sales and purchases on a company’s cash flow and working capital requirements.

Determine the effect of borrowing and loan repayments on a company's cash balance.

Understand the process of collecting receivables within specified periods and its influence on liquidity.

---

Definitions:

Cognitive Biases

Systematic patterns of deviation from norm or rationality in judgment, leading individuals to make illogical decisions.

Overconfidence Effect

A cognitive bias where an individual's subjective confidence in their judgments is greater than their objective accuracy.

Confirmation Bias

The tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses.

Cognitive Biases

Cognitive biases are systematic patterns of deviation from norm or rationality in judgment, often leading to illogical interpretation or decision-making.