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:

Direct Mail

A marketing strategy involving sending promotional materials or correspondences directly to prospective customers through the mail.

Advertising Media

Various platforms or channels used to promote products, services, or brands to consumers, including TV, radio, online platforms, and print media.

Unreliable Sales Forecasts

Projections of future sales that are uncertain or likely to be inaccurate due to various factors like market volatility or insufficient data.

Industry-Wide Trends

The prevailing movements or directions that affect an entire industry, encompassing changes in technology, consumer preferences, regulatory environment, and market dynamics.