Which of the Following Statements Is FALSE

question 26

Multiple Choice

Which of the following statements is FALSE?

• A)The CAPM remains the predominant model used in practice to determine the equity cost of capital.
• B)Low beta stocks have tended to perform somewhat better than the CAPM predicts.
• C)The empirically estimated security market line is somewhat steeper than that predicted by the CAPM.
• D)Some evidence suggests that the market risk premium has declined over time.

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Definitions:

Union Densities

A measurement indicating the proportion of workers in a specific area, industry, or country who are members of trade unions.

Southwestern States

Refers to the region of the United States that includes Arizona, New Mexico, Oklahoma, and Texas, often characterized by its distinct cultural heritage and landscapes.

Theory X

A management theory proposed by Douglas McGregor suggesting that employees are inherently lazy and will avoid work if possible, thus needing close supervision and control.

Management Theory

A collection of ideas and principles that outline how managers should approach organizational leadership, planning, and decision-making.