Which of the Following Statements Is False

question 82

Multiple Choice

Which of the following statements is false?

• A) Because investors are risk averse, they will demand a risk premium to hold unsystematic risk.
• B) Over any given period, the risk of holding a stock is that the dividends plus the final stock price will be higher or lower than expected, which makes the realized return risky.
• C) The risk premium for diversifiable risk is zero, so investors are not compensated for holding firm-specific risk.
• D) Because investors can eliminate firm-specific risk "for free" by diversifying their portfolios, they will not require a reward or risk premium for holding it.

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Definitions:

Digital Technology

The branch of technology that involves the use of digital devices and systems to generate, process, or store data.

Customer Relationships

These are the ongoing relationships a company maintains with its customers with the goal of fostering loyalty and long-term engagement.

Unique Capabilities

Distinctive skills, technologies, or resources that give a company a competitive advantage over others.

Form Utility

The value added to goods through a change in their form or shape.