Which of the Following Statements Is FALSE

question 99

Multiple Choice

Which of the following statements is FALSE?

• A) The risk premium of a security is equal to the market risk premium (the amount by which the market's expected return exceeds the risk-free rate), divided by the amount of market risk present in the security's returns measured by its beta with the market.
• B) We refer to the beta of a security with the market portfolio simply as the securities beta.
• C) There is a linear relationship between a stock's beta and its expected return.
• D) A security with a negative beta has a negative correlation with the market, which means that this security tend to perform will when the rest of the market is doing poorly.