Which of the Following Statements Is FALSE

question 87

Multiple Choice

Which of the following statements is FALSE?

• A)The imperfections in the CAPM may be critical in the context of capital budgeting and corporate finance,where errors in estimating the cost of capital are likely to be far more important than small discrepancies in the project cash flows.
• B)To estimate the expected market risk premium,we can look at the historical average excess return of the market over the risk-free interest rate.
• C)The highest beta stocks have tended to underperform what the CAPM predicts.
• D)Given an assessment of an index's future cash flows,we can estimate the expected return of the market by solving for the discount rate that is consistent with the current level of the index.

---

Definitions:

Address Operator

The address operator, represented by &, is used in languages like C and C++ to retrieve the memory address of a variable.

Extern Declaration

A statement used in C and C++ to declare a variable or function in another file or translation unit.

Compilation Error

A compilation error occurs when the source code of a program violates the syntax rules or semantic constraints of the programming language.

Global Static Variable

A variable that is globally accessible within a file but its scope is limited to the file due to the static keyword, preventing external access.