Which of the Following Statements Is False

question 43

Multiple Choice

Which of the following statements is false?

• A) The market capitalization is the total market value of its outstanding shares.
• B) The market portfolio is the portfolio of all risky investments.
• C) Many practitioners believe it insensible to use the CAPM and the security market line as a practical means to estimate a stock's required return and therefore a firm's equity cost of capital.
• D) To estimate the equity cost of capital using the CAPM, the first thing we need to do is identify the market portfolio.

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Mastery

The process of acquiring complete knowledge or skill in a subject or activity.

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A measure of a person's cognitive abilities and potential, compared to the population, usually determined by standardized tests.

Mental Age

A measure of an individual's cognitive ability compared to the average cognitive ability of others in their age group.

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The exact age of an individual measured in years from the date of birth to the current date.