Which of the Following Statements Is False

question 97

Multiple Choice

Which of the following statements is false?

• A) The beta of a security is the ratio of its volatility due to market risk to the volatility of the market as a whole.
• B) Under the CAPM assumptions, the market portfolio is efficient, so beta is the appropriate measure of risk to determine a security's risk premium.
• C) Under the CAPM assumptions, we can identify the efficient portfolio: it is equal to the market portfolio.
• D) We can determine the expected return for a security and the cost of capital of an investment opportunity by using the risk-free investment as a benchmark.

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Definitions:

Market Customers

Individuals or entities that purchase goods or services in a particular market or industry.

Market Conditions

The various factors and influences that affect the supply and demand of goods and services, thereby shaping the economic landscape in which businesses operate.

Network Design

The planning and structuring of a communication network, involving the selection and interconnection of hardware and software components to meet specific objectives.

Subcontracts

Secondary contracts made under the main contract, often used to delegate specific tasks or responsibilities to third parties.