Which of the Following Statements Is FALSE

question 9

Multiple Choice

Which of the following statements is FALSE?

• A)Because investors are risk averse,they will demand a risk premium to hold unsystematic risk.
• B)Over any given period,the risk of holding a stock is that the dividends plus the final stock price will be higher or lower than expected,which makes the realized return risky.
• C)The risk premium for diversifiable risk is zero,so investors are not compensated for holding firm-specific risk.
• D)Because investors can eliminate firm-specific risk "for free" by diversifying their portfolios,they will not require a reward or risk premium for holding it.

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Patent Laws

Legal statutes that protect inventors by giving them exclusive rights to produce, use, and sell their inventions for a certain period of time.

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Exclusive rights granted to a single entity, allowing it to be the sole provider of a good or service without competition.

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Advancements and innovations in technology that affect productivity, efficiency, and economic growth.