Which of the Following Statements Is False

question 48

Multiple Choice

Which of the following statements is false?

• A) The risk premium of a security is equal to the market risk premium (the amount by which the market's expected return exceeds the risk-free rate), divided by the amount of market risk present in the security's returns measured by its beta with the market.
• B) We refer to the beta of a security with the market portfolio simply as the securities beta.
• C) There is a linear relationship between a stock's beta and its expected return.
• D) A security with a negative beta has a negative correlation with the market, which means that this security tends to perform well when the rest of the market is doing poorly.

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Definitions:

Feeling Happy

A state of well-being and contentment.

Conditioned Stimulus

An initially indifferent stimulus that, following its connection with an unconditioned stimulus, eventually induces a conditioned response.

Unconditional Stimulus

Regarding classical conditioning, a stimulus spontaneously and automatically produces a response, requiring no earlier learning.

Operant Stimulus

A stimulus that follows a behavior and increases or decreases the likelihood of that behavior occurring again; used in operant conditioning.