Which of the Following Statements Is False

question 42

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:

Plato

Plato was an ancient Greek philosopher who laid the foundational elements of Western philosophy and science.

Aristotle

An ancient Greek philosopher and polymath, a student of Plato and teacher of Alexander the Great, who made significant contributions to numerous areas of philosophy and science.

Art of Theater

The craft and study of performing arts, including acting, direction, and production, aimed at presenting stories on stage.

Aristotle

An ancient Greek philosopher and polymath, whose extensive works laid the foundation for much of Western philosophy, science, and ethics.