Which of the Following Statements Is False

question 26

Multiple Choice

Which of the following statements is false?

• A) Beta measures the sensitivity of a security to market-wide risk factors.
• B) Volatility measures total risk, while beta measures only systematic risk.
• C) The beta is the expected percentage change in the excess return of the market portfolio for a 1% change in the excess return of a security.
• D) Utilities tend to be stable and highly regulated, and thus are insensitive to fluctuations in the overall market.

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Definitions:

Net Loss

The amount by which total expenses exceed total revenues for a business, indicating a financial loss.

Income Summary Account

An account used in closing process to aggregate all income and expenses accounts before determining and transferring the net income or loss to the capital account.

Adjusting Entries

Entries recorded at the conclusion of an accounting period to adjust the balances of accounts prior to the compilation of financial statements.

Income Statement Accounts

Accounts used to record transactions affecting a company’s income, expenses, and the resulting net income or loss over a period of time.