Which of the Following Statements Is FALSE

question 16

Multiple Choice

Which of the following statements is FALSE?

• A)We should be suspicious of beta estimates that are extreme relative to industry norms.
• B)When using historical data,there is always the possibility of estimation error.
• C)Evidence suggests that betas tend to revert toward zero over time.
• D)For stocks,common practice is to use at least two years of weekly return data or five years of monthly return data when estimating beta.

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Definitions:

Transformational Leadership

A leadership style where leaders inspire and motivate employees to exceed their own interests for the sake of the organization and encourage innovation.

Statutory Lien

A legal claim on property, either personal or real, granted by law to creditors as security for a debt or obligation.

Debtor

An individual or entity that owes money or is in debt to another party.

Composition Agreement

An arrangement between a debtor and their creditors in which the creditors agree to accept a partial payment in satisfaction of the debts owed.