Which of the Following Statements Is FALSE

question 60

Multiple Choice

Which of the following statements is FALSE?

• A)The risk premium of any marketable security can be written as the sum of the risk premium of each factor multiplied by the sensitivity of the stock with that factor.
• B)The factor betas measure the sensitivity of the stock to a particular factor.
• C)If we use more than one portfolio as factors,then together these factors will capture systematic risk,but each factor captures different components of the systematic risk.
• D)When we use more than one portfolio to capture risk,the model is known as a single-factor model.

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Definitions:

Cost of Production

The total expense incurred in manufacturing goods or providing services, including raw materials, labor, and overhead costs.

Trade Barriers

Measures that governments or public authorities introduce to make imported goods or services less competitive than locally produced goods and services.

Economic Perspective

The viewpoint from which economic analysts assess and interpret the workings of economic systems and the behavior of economic agents.

Foreign Competition

The competition that domestic companies face from products and services produced in other countries.