Which of the Following Statements Is False

question 95

Multiple Choice

Which of the following statements is false?

• A) Many practitioners prefer to use average industry betas rather than individual stock betas.
• B) When estimating beta by using past returns it is best to use the longest time horizon of returns available.
• C) The CAPM predicts that a security's expected return depends on its beta with regard to the market portfolio of all risky investments available to investors.
• D) If we use too short a time horizon when estimating beta, our estimate of beta will be unreliable.

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