Which One of These Statements Is True

question 19

Multiple Choice

Which one of these statements is true?

• A)The betas used in the CAPM must be greater than 1 but less than 2.
• B)By convention,the market is given a beta of zero.
• C)There is zero chance of default on a U.S.Treasury bill.
• D)A U.S.Treasury bill has a beta of zero.
• E)The rate of return on a U.S.Treasury bill is used as the value of R_M in the CAPM.

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Definitions:

Company Finance

Refers to the financial activities related to running a company, focusing on maximizing shareholder value through long-term and short-term financial planning and the implementation of various strategies.

Horizontal Analysis

An analytical technique in financial statement analysis where an item or line is compared over multiple periods to identify trends or patterns.

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity, presented in a structured manner.

Percentage Analysis

A financial analysis tool that expresses each item within a financial statement as a percent of a base item, facilitating comparison.