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:

Civil Trial

A judicial process to resolve disputes between parties over legal rights, typically not involving criminal charges.

Criminal Trial

A legal proceeding in which a person accused of a crime is tried in a court of law, facing charges brought by the state or government.

Jury Size

The number of members in a jury which varies depending on the jurisdiction and type of case, typically ranging from 6 to 12 jurors.

Cross-Examination

A stage in a trial where a witness is questioned by the opposing party to test their credibility and the truth of their statements.