Which of the Following Statements Is FALSE

question 15

Multiple Choice

Which of the following statements is FALSE?

• A)The Capital Asset Pricing Model is the most important method for estimating the cost of capital that is used in practice.
• B)Because the risk that determines expected returns is unsystematic risk,which is measured by beta,the cost of capital for an investment is the expected return available on securities with the same beta.
• C)A common assumption is that the project has the same risk as the firm.
• D)To determine a project's cost of capital we need to estimate its beta.

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Definitions:

Racial Categorization

The process of classifying people into groups based on physical characteristics, such as skin color, often leading to social and economic inequalities.

Court Decisions

The judgments, rulings, or orders issued by a court of law regarding the outcome of legal cases.

Ethnicity

A category of people who identify with each other based on shared attributes such as culture, language, values, or ancestry.

Family Lineage

The line of descent or lineage tracing back through generations within a family, often documented through genealogical research.