Which of the Following Statements Is FALSE

question 1

Multiple Choice

Which of the following statements is FALSE?

• A)Beta is the expected percent change in the excess return of the security for a 1% change in the excess return of the market portfolio.
• B)Beta represents the amount by which risks that affect the overall market are amplified for a given stock or investment.
• C)It is common practice to estimate beta based on the historical correlation and volatilities.
• D)Beta measures the diversifiable risk of a security,as opposed to its market risk,and is the appropriate measure of the risk of a security for an investor holding the market portfolio.

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Definitions:

Fossil Record

The collection of preserved remains or imprints of living organisms found in sedimentary rocks, which provides historical evidence for evolution.

Evolution

The evolutionary process by which different types of life forms are speculated to have evolved and differentiated from their ancestral forms across the history of the globe.

Random Process

A procedure or phenomenon in which the outcome is unpredictable, and under identical conditions can lead to different results.

Described

Characterized or detailed in terms of appearance, function, or attributes, often used in the context of formal identification and naming in scientific classification.