Which of the Following Statements Is False

question 67

Multiple Choice

Which of the following statements is false?

• A) There may be reasons to exclude certain historical data for being anomalous when estimating beta.
• B) Many practitioners use adjusted betas, which are calculated by averaging the estimated beta with 1.0.
• C) The beta estimated from linear regression can be very sensitive to outliers, which are returns of unusually small magnitude.
• D) If we use very old data to when estimating beta, the data may be unrepresentative of the current market risk of the security.

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Definitions:

Steamship Line

A company that owns and operates ships used for shipping goods across oceans and seas.

Ku Klux Klan

A white supremacist hate group originally formed in the aftermath of the American Civil War, known for its violent terrorist activities aimed at African Americans and other minority groups.

Fraud Conviction

A legal judgment that an individual has committed fraud, a deceptive act intended to result in financial or personal gain.

Black Working Class

Refers to African American workers in various industries who are typically in non-managerial positions and have historically faced economic and social challenges.