Use the following information to answer the question(s)below.
-Which of the following statements is FALSE?
A)Securities that tend to move more than the market have betas lower than 0.
B)Securities whose returns tend to move in tandem with the market on average have a beta of 1.
C)Beta corresponds to the slope of the best fitting line in the plot of the securities excess returns versus the market excess return.
D)The statistical technique that identifies the bets-fitting line through a set of points is called linear regression.

Question

Use the following information to answer the question(s)below. 
-Which of the following statements is FALSE?
A)Securities that tend to move more than the market have betas lower than 0. 
B)Securities whose returns tend to move in tandem with the market on average have a beta of 1. 
C)Beta corresponds to the slope of the best fitting line in the plot of the securities excess returns versus the market excess return. 
D)The statistical technique that identifies the bets-fitting line through a set of points is called linear regression.

Quizplus · Accepted Answer

The statement in option A is false. Securities that tend to move more than the market have betas higher than 1, while securities that tend to move less than the market have betas lower than 1. A beta of 0 indicates no correlation with the market.

Use the Following Information to Answer the Question(s)below