Which of the Following Statements Is False

question 86

Multiple Choice

Which of the following statements is false?

• A) The risk premium of a security is equal to the market risk premium (the amount by which the market's expected return exceeds the risk-free rate), divided by the amount of market risk present in the security's returns measured by its beta with the market.
• B) We refer to the beta of a security with the market portfolio simply as the security's beta.
• C) There is a linear relationship between a stock's beta and its expected return.
• D) A security with a negative beta has a negative correlation with the market, which means that this security tends to perform well when the rest of the market is doing poorly.

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Definitions:

Capitalist System

A system of economics in which commerce, the industrial sector, and production resources are primarily or wholly owned and managed by private entities for financial gain.

Conflict Theory

A sociological perspective that views social life as a competition and focuses on the distribution of resources, power, and inequality within a society.

Economic Reliance

A state or condition where individuals, communities, or countries depend on external economic factors or entities for their financial stability and growth.

Rural Communities

Communities characterized by small populations and a high degree of social cohesion and integration, often located in non-urban areas and reliant on agriculture or related industries.