Which of the Following Statements Is False

question 16

Multiple Choice

Which of the following statements is false?

• A) Many practitioners analyze other financial characteristics of a firm when they forecast betas.
• B) Canadian Treasuries are never subject to interest rate risk.
• C) If a firm were to change industries, using its historical beta would be inferior to using the beta of other firms in the new industry.
• D) When using historical returns to forecast future betas, we must be mindful of changes in the environment that might cause the future to differ from the past.

---

Definitions:

Recently Formed

Describing something that has come into existence or been created or established a short while ago.

South Atlantic Ocean

The part of the Atlantic Ocean located south of the Equator, extending between the continents of South America and Africa.

Rifted Apart

A geographical term describing the process by which tectonic plates move away from each other, creating rift valleys or separating landmasses.

Oceanic Plateau

A large, flat, elevated area of the seabed formed by volcanic activity, often found in the middle of ocean basins.