Which of the Following Statements Is False

question 95

Multiple Choice

Which of the following statements is false?

• A) Many practitioners prefer to use average industry betas rather than individual stock betas.
• B) When estimating beta by using past returns it is best to use the longest time horizon of returns available.
• C) The CAPM predicts that a security's expected return depends on its beta with regard to the market portfolio of all risky investments available to investors.
• D) If we use too short a time horizon when estimating beta, our estimate of beta will be unreliable.

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Definitions:

Predictive Modeling

The process of using statistical techniques and algorithms to forecast outcomes based on historical data.

Internal Company Data

Information generated within a company, including financial records, employee details, and operational statistics, used for analysis and strategic decision-making.

Sales Force Reports

Documents or data summaries that provide insights into the activities, performance, and outcomes of a company's sales team.

Customer Support Records

Documentation and data compilation that track interactions, support issues, and resolutions between a company and its customers.