Which of the Following Statements Is False

question 91

Multiple Choice

Which of the following statements is false?

• A) The imperfections in the CAPM may be critical in the context of capital budgeting and corporate finance, where errors in estimating the cost of capital are likely to be far more important than small discrepancies in the project cash flows.
• B) To estimate the expected market risk premium we can look at the historical average excess return of the market over the risk-free interest rate.
• C) The highest beta stocks have tended to underperform what the CAPM predicts.
• D) Given an assessment of an index's future cash flows, we can estimate the expected return of the market by solving for the discount rate that is consistent with the current level of the index.

---

Definitions:

Myers-Briggs Type Indicator

A psychological assessment tool designed to measure individual personality types based on four dichotomies of preferences.

Perceptual Mapping

A visual technique used in marketing to display the position of products or brands in the consumer's mind relative to their competitors, based on certain attributes.

Open Area

A space that is accessible and unenclosed, often used in the context of work environments to foster collaboration.

Johari Window

A model used to understand and improve self-awareness, interpersonal relationships, and group dynamics by categorizing known and unknown information about oneself and others.