Which of the Following Statements Is False

question 49

Multiple Choice

Which of the following statements is false?

• A) Beta differs from volatility.
• B) The risk premium investors can earn by holding the market portfolio is the difference between the market portfolio's expected return and the risk-free interest rate.
• C) Stocks in cyclical industries, in which revenues tend to vary greatly over the business cycle, are likely to be more sensitive to systematic risk and have higher betas than stocks in less sensitive industries.
• D) If we assume that the market portfolio (or the S&P 500) is efficient, then changes in the value of the market portfolio represent unsystematic shocks to the economy.

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Definitions:

Collecting Tubule

A component of the kidney's nephron that transports urine from the distal convoluted tubule to the renal pelvis.

Aldosterone

A hormone produced by the adrenal glands that helps regulate blood pressure by controlling sodium and water levels in the body.

ADH

Antidiuretic Hormone, a peptide hormone secreted by the pituitary gland that regulates the body's retention of water by increasing water reabsorption in the kidneys.

Blood Plasma

The liquid component of blood where cells are suspended, comprising water, salts, proteins, and various other substances.