Which of the Following Statements Is False

question 73

Multiple Choice

Which of the following statements is false?

• A) Firm-specific news is good or bad news about the company itself.
• B) Firms are affected by both systematic and firm-specific risk.
• C) When firms carry both types of risk, only the firm-specific risk will be diversified when we combine many firms' stocks into a portfolio.
• D) The risk premium for a stock is affected by its idiosyncratic risk.

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Definitions:

Social Desirability

The habit of people replying to questions in such a way that they think will impress or be approved by others.

Biological Motives

Biological motives refer to the innate drives that guide behavior and are necessary for survival, such as hunger, thirst, and the need for sleep.

Personal Projects

Individual pursuits or tasks that a person undertakes, reflecting personal goals or desired outcomes.

Brian Little

A distinguished research psychologist known for his studies on personality psychology and personal projects.