Which of the following statements is FALSE?
A)Many practitioners analyze other financial characteristics of a firm when they forecast betas.
B)U.S.Treasuries are never subject to interest rate risk unless we select a maturity equal to our investment horizon.
C)If a firm were to change industries,using its historical beta would be inferior to using the beta of other firms in the new industry.
D)When using historical returns to forecast future betas,we must be mindful of changes in the environment that might cause the future to differ from the past.

Question

Quizplus · Accepted Answer

This statement is false because U.S.Treasuries are subject to interest rate risk, regardless of the investment horizon. The value of Treasuries can fluctuate depending on changes in interest rates, which affect their yields.

Which of the Following Statements Is FALSE