Which of the Following Statements Is False

question 37

Multiple Choice

Which of the following statements is false?

• A) The CAPM states that we should use the risk-free interest rate corresponding to the investment horizon of the firm's investors.
• B) To determine the risk premium for a stock using the security market line, we need an estimate of the market risk premium.
• C) When surveyed, the vast majority of large firms and financial analysts reported using the yields of Treasury Bills to determine the risk-free rate.
• D) The risk-free interest rate is generally determined using the yields of U.S. Treasury securities, which are free from default risk.

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Definitions:

Union Coverage Rates

The percentage of employees who are members of a union or covered by a collective bargaining agreement.

Organizational Decision Making

The process by which decisions are made in an organization, which involves identifying and choosing alternatives based on values and preferences of the decision-maker.

Labor Relations Strategy

A plan devised by organizations to manage interactions with employees and their representatives in a way that advances the company's objectives.

Collective Bargaining

Collective bargaining is the process of negotiation between employers and a group of employees aimed at reaching agreements to regulate working conditions, wages, and other aspects of workers' compensation and rights.