Which of the Following Statements Is False

question 64

Multiple Choice

Which of the following statements is false?

• A) Once the characteristic variables have been identified and measured for each firm, the return of each characteristic can be inferred from the data.
• B) Even though the risk and return associated with each characteristic may remain stable, because the characteristics of a firm may change over time, so will the firm's risk and expected return.
• C) Using a long period of time to estimate beta reduces measurement error, but because firms evolve dynamically, old data might not reflect the current risk profile of the firm.
• D) Rather than attempting to estimate the risk and expected return of the firm indirectly, the characteristic variable model of returns views firms as a portfolio of different measurable "characteristics" that together determine the firm's risk and return.

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Definitions:

Parenting Behaviours

The actions and strategies employed by parents in raising their children.

Endangered Species

Endangered species are organisms that are at risk of extinction due to a variety of factors such as loss of habitat, climate change, or overexploitation.

Psychological Research

The scientific study of the human mind, behaviors, and mental processes, using empirical methods and data analysis.

Deception

The act of misleading or falsely informing someone about the true nature of a situation or one’s intentions, often used in psychological research to maintain the integrity of the study.