Which of the Following Statements Is False

question 61

Multiple Choice

Which of the following statements is false?

• A) The risk premium of any marketable security can be written as the sum of the risk premiums of each factor multiplied by the sensitivity of the stock with those factors.
• B) The factor beta measures the sensitivity of the stock to a particular factor.
• C) If we use more than one portfolio as factors, then together these factors will capture systematic risk, but each factor captures different components of the systematic risk.
• D) When we use more than one portfolio to capture risk, the model is known as a single factor model.

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Definitions:

Union Organization

An association of workers formed to negotiate collectively with their employer regarding wages, work conditions, and other aspects of their work.

Crowd Contagion Theory

A sociological concept suggesting that ideas, emotions, and behaviors can spread through crowds as if they were infectious diseases.

Strain Theory

A sociological concept that argues deviance and crime occur when there is a disconnect between societal goals and the methods available to achieve these goals.

Race-aggression Theory

A theoretical framework that suggests a link between racial identity or perceptions and the propensity for aggressive behavior, often critiqued for oversimplification and biases.