Which of the Following Statements Is False

question 40

Multiple Choice

Which of the following statements is false?

• A) Many practitioners analyze other financial characteristics of a firm when they forecast betas.
• B) Canadian Treasuries are never subject to interest rate risk unless we select a maturity equal to our investment horizon.
• C) If a firm were to change industries, using its historical beta would be inferior to using the beta of other firms in the new industry.
• D) When using historical returns to forecast future betas, we must be mindful of changes in the environment that might cause the future to differ from the past.

---

Definitions:

Balance of Payments

A record of all economic transactions between the residents of a country and the rest of the world within a specific period.

Goods Deficit

A situation where a country's imports of physical goods exceed its exports, leading to a negative balance in trade for physical goods.

Exchange Rate

The value of one currency for the purpose of conversion to another, affecting international trade, investments, and economic relations between countries.

British Pounds

The currency of the United Kingdom, symbolized by £, and one of the major currencies traded worldwide.