Which of the Following Statements Is False

question 73

Multiple Choice

Which of the following statements is false?

• A) Firm-specific news is good or bad news about the company itself.
• B) Firms are affected by both systematic and firm-specific risk.
• C) When firms carry both types of risk, only the firm-specific risk will be diversified when we combine many firms' stocks into a portfolio.
• D) The risk premium for a stock is affected by its idiosyncratic risk.

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Definitions:

Categorization

The process of recognizing, understanding, and organizing concepts and objects based on common qualities.

Recall

The mental process of retrieving facts or information from memory.

Turn-Taking

A type of communication management mechanism where participants in a conversation understand and follow implicit or explicit rules on when to speak.

Pragmatics

The practical aspects of communication, such as adaptation of language to fit the social situation.