Which of the Following Statements Is False

question 6

Multiple Choice

Which of the following statements is false?

• A) There is an economic reason why firm's betas might vary-the firm itself varies.
• B) Only a few years of data are required to estimate risk premiums, since both risk premiums and betas remain stable over time.
• C) When firms make new investments in new areas or shut down unprofitable projects in old areas their risk profiles change as well.
• D) Calculating the cost of capital using multifactor models like the FFC factor specification or the CAPM relies on accurate estimates of risk premiums and betas.

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Definitions:

Autocratically

In a manner that involves absolute or dictatorial control, often referring to a leadership or governance style.

Crisis

A significant, unexpected, and potentially dangerous situation requiring immediate attention and action to prevent or mitigate damage.

Communicate

The act of conveying information, ideas, or feelings to others through speech, writing, or other forms of expression.

Supportive Leader

A leader who prioritizes the welfare of their employees by providing emotional and practical support.