Which of the Following Statements Is False

question 67

Multiple Choice

Which of the following statements is false?

• A) There may be reasons to exclude certain historical data for being anomalous when estimating beta.
• B) Many practitioners use adjusted betas, which are calculated by averaging the estimated beta with 1.0.
• C) The beta estimated from linear regression can be very sensitive to outliers, which are returns of unusually small magnitude.
• D) If we use very old data to when estimating beta, the data may be unrepresentative of the current market risk of the security.

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Definitions:

Efferent Nerves

Nerves that carry signals away from the central nervous system to effectors (muscles or glands), eliciting a response.

Afferent Nerves

Nerve fibers that carry sensory signals from the body's periphery towards the central nervous system.

Receptors

Specialized cells or proteins in organisms that detect and respond to chemicals, light, and other stimuli.

Effectors

Organs or cells that act in response to a stimulus, often referring to muscles or glands that carry out the body's responses to stimuli.