Which of the following statements is false?
A) The CAPM states that we should use the risk-free interest rate corresponding to the investment horizon of the firm's investors.
B) To determine the risk premium for a stock using the security market line, we need an estimate of the market risk premium.
C) When surveyed, the vast majority of large firms and financial analysts reported using the yields of Treasury Bills to determine the risk-free rate.
D) The risk-free interest rate is generally determined using the yields of Canadian Treasury securities, which are free from default risk.

Question

Quizplus · Accepted Answer

C) When surveyed, the vast majority of large firms and financial analysts reported using the yields of long-term (10- to 30-year) bonds to determine the risk-free rate.

Which of the Following Statements Is False