Which of the Following Statements Is FALSE

question 85

Multiple Choice

Which of the following statements is FALSE?

• A)We refer to the beta of a security with the market portfolio simply as the 'securities beta'.
• B)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.
• C)A security with a negative beta has a negative correlation with the market, which means that this security tends to perform well when the rest of the market is doing poorly.
• D)There is a linear relationship between a share's beta and its expected return.

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Definitions:

Depreciated

The reduction in the value of an asset over time, typically due to wear and tear or obsolescence.

Tax Rate

The percentage at which an individual or corporation is taxed.

Depreciated

Depreciated refers to the decrease in value of an asset over time, often due to wear and tear or obsolescence, recognized in accounting to allocate the cost of an asset over its useful life.

Payback Period

The payback period is the time required for an investment to generate cash flows sufficient to recover its initial cost.