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:

Internationalization

The process of designing products, services, and content to facilitate their adaptation to various languages and cultures.

Security For Debt

Assets pledged by a borrower to secure repayment of a loan.

Legal Aspects

Pertains to the legal perspectives, implications, and considerations inherent to a particular issue or case.

General Contracting

The oversight and coordination of a construction project, typically involving hiring and managing subcontractors.