Which of the Following Statements Is False

question 73

Multiple Choice

Which of the following statements is false?

• A) We should be suspicious of beta estimates that are extreme relative to industry norms.
• B) When using historical data, there is always the possibility of estimation error.
• C) Evidence suggests that betas tend to revert toward zero over time.
• D) For stocks, common practice is to use at least two years of weekly return data or five years of monthly return data when estimating beta.

---

Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a specific price level, at a given time.

Price Decrease

A reduction in the cost of goods or services, often reflective of changes in supply and demand, competition, or production costs.

Personal Computers

Electronic devices designed for individual use, capable of executing a wide range of applications, from word processing and web browsing to gaming and programming.

Normal Good

A good for which demand increases as consumer income rises, and decreases as consumer income falls.