Which of the Following Statements Is FALSE

question 91

Multiple Choice

Which of the following statements is FALSE?

• A) There may be reasons to exclude certain historical data as anomalous when estimating beta.
• B) Many practitioners use adjusted betas, which are calculated by averaging the estimated beta with 1.0.
• C) The beta estimated we obtain from linear regression can be very sensitive to outliers, which are returns of unusually small magnitude.
• D) If we use very old data to when estimating beta, they data may be unrepresentative of the current market risk of the security.

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Definitions:

Quota

A government-imposed trade restriction that limits the number or monetary value of goods that can be imported or exported during a particular time frame.

Supply Price

The minimum price at which a producer is willing to sell a good or service, influenced by production costs and market conditions.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of the good that consumers are willing and able to purchase at each price level.

Quota

A government-imposed trade restriction limiting the number or value of goods that can be imported or exported during a specific time.