Which of the Following Statements Is False

question 102

Multiple Choice

Which of the following statements is false?

• A) The CAPM remains the predominant model use in practice to determine the equity cost of capital.
• B) Low beta stocks have tended to perform somewhat better than the CAPM predicts.
• C) The empirically estimated security market line is somewhat steeper than that predicted by the CAPM.
• D) Some evidence suggests that the market risk premium has declined over time.

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Definitions:

Contingently True

A statement that is true based on specific circumstances or conditions rather than being universally true.

God Exists

A philosophical or theological claim that a supreme being or deity is real and exists independently of human thought or belief.

Epistemology

The study of human knowledge and its nature, sources, and justification.

Knowledge

Information, understanding, or skill that one gets from experience or education; the theoretical or practical understanding of a subject.