Which of the Following Statements Is False

question 95

Multiple Choice

Which of the following statements is false?

• A) Many practitioners prefer to use average industry betas rather than individual stock betas.
• B) When estimating beta by using past returns it is best to use the longest time horizon of returns available.
• C) The CAPM predicts that a security's expected return depends on its beta with regard to the market portfolio of all risky investments available to investors.
• D) If we use too short a time horizon when estimating beta, our estimate of beta will be unreliable.

---

Definitions:

Limited Liability Partnership

A limited liability partnership (LLP) is a legal entity where partners have limited liabilities, protecting their personal assets from business debts and obligations.

Partnership Agreement

A formal arrangement between two or more parties to manage and operate a business and share its profits.

Secretary of the State

A high-ranking official typically responsible for keeping public records, administering elections, and managing the affairs of the state government.

S Corporation

A special form of corporation in the United States that allows for the income, losses, deductions, and credits to be passed directly to shareholders to avoid double taxation.