Which of the Following Statements Is False

question 14

Multiple Choice

Which of the following statements is false?

• A) The CAPM states that we should use the risk-free interest rate corresponding to the investment horizon of the firm's investors.
• B) To determine the risk premium for a stock using the security market line, we need an estimate of the market risk premium.
• C) When surveyed, the vast majority of large firms and financial analysts reported using the yields of Treasury Bills to determine the risk-free rate.
• D) The risk-free interest rate is generally determined using the yields of Canadian Treasury securities, which are free from default risk.

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Definitions:

Permeability

A measure of how easily liquids or gases can pass through a material or membrane.

Electrical Properties

Characteristics of materials or systems that define their behavior in the presence of electric fields, including conductivity, resistivity, and dielectric constant.

Ion Concentration

The measure of the number of ions in a particular volume of solution, impacting electrical conductivity, pH, and various biological processes.

Plasma Membrane

A selective barrier that surrounds a cell, controlling the movement of substances in and out of the cell.