Which of the Following Statements Is False

question 61

Multiple Choice

Which of the following statements is false?

• A) The risk premium of any marketable security can be written as the sum of the risk premium of each factor multiplied by the sensitivity of the stock with that factor.
• B) The factor betas measure the sensitivity of the stock to a particular factor.
• C) If we use more than one portfolio as factors, then together these factors will capture systematic risk, but each factor captures different components of the systematic risk.
• D) When we use more than one portfolio to capture risk, the model is known as a single factor model.

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Definitions:

Operant Learning

A method of learning that occurs through rewards and punishments for behavior, also known as operant conditioning.

Insight

The ability to understand the inner nature of things or a situation in a clear and deep way, often leading to problem-solving.

Latent Learning

A process in which learning takes place, but there is no demonstration of that knowledge until a reward or incentive is presented.

Cognitive Mapping

The process by which individuals mentally acquire, code, store, recall, and decode information about the relative locations and attributes of phenomena in their everyday or metaphorical spatial environment.