Which of the Following Statements Is FALSE

question 24

Multiple Choice

Which of the following statements is FALSE?

• A)Beta differs from volatility.
• B)The risk premium investors can earn by holding the market portfolio is the difference between the market portfolio's expected return and the risk-free interest rate.
• C)Stocks in cyclical industries,in which revenues tend to vary greatly over the business cycle,are likely to be more sensitive to systematic risk and have higher betas than stocks in less sensitive industries.
• D)If we assume that the market portfolio (or the S&P 500)is efficient,then changes in the value of the market portfolio represent unsystematic shocks to the economy.

---

Definitions:

External

Originating from outside, not confined within an entity or individual.

Achievement Motivation

The drive to excel, achieve in relation to a set of standards, or strive to succeed.

TAT

Thematic Apperception Test, a projective psychological test used to reveal a person's social drives or needs by their interpretation of ambiguous images.

Locus of Control

is a psychological concept that refers to individuals’ belief in their ability to control events affecting them, classified as either internal (belief in personal control) or external (belief that external forces dominate).