Not a True Statement Concerning Industry Analysis

A

Researchers found almost no association in individual industry performance year to year or over sequential rising or falling markets.

Let's go through each statement and determine which one is not true concerning industry analysis.

A. Industries that perform well in one time period will continue to outperform the aggregate market in subsequent time periods.

This statement is not necessarily true. While some industries may continue to perform well over time, it is not guaranteed that they will always outperform the aggregate market in subsequent periods. Industries are influenced by various factors such as changes in consumer preferences, technological advancements, regulatory changes, and macroeconomic conditions, which can affect their performance. Therefore, it is possible for industries that perform well in one time period to underperform or perform in line with the market in subsequent periods. Hence, statement A is not a true statement concerning industry analysis.

B. Risk measures for different industries remain fairly constant over time.

This statement is also not true. Risk measures for different industries can vary over time. Industries can experience changes in risk due to shifts in market dynamics, competitive forces, technological disruptions, or regulatory changes. For example, an industry may face increased competition, leading to higher risks, or it may benefit from favorable regulatory changes, reducing its risk profile. Therefore, risk measures for different industries are not necessarily constant and can change over time. Statement B is a true statement concerning industry analysis.

C. During any time period, the returns for different industries vary within a wide range.

This statement is true. Different industries can experience varying returns during any given time period. Industries have different growth prospects, profitability levels, and risk profiles, which can result in significant variations in their returns. Economic factors, market trends, and industry-specific factors can influence the performance of different industries. Therefore, the returns for different industries can indeed vary within a wide range during any time period. Statement C is a true statement concerning industry analysis.

D. Company analysis is a necessary follow-up to industry analysis.

This statement is true. While industry analysis provides insights into the overall dynamics and trends of an industry, it is necessary to complement it with company analysis. Company analysis focuses on evaluating individual companies within an industry, considering their specific competitive positioning, financial health, management quality, and other factors. Industry analysis helps in identifying attractive industries, while company analysis helps in selecting specific companies within those industries that have strong fundamentals and potential for future success. Therefore, company analysis is indeed a necessary follow-up to industry analysis. Statement D is a true statement concerning industry analysis.

E. During any time period, different industries' risk levels vary within wide ranges.

This statement is also true. Different industries can have varying risk levels during any given time period. Industries are exposed to different types of risks such as economic risk, regulatory risk, technological risk, and competitive risk, among others. The risk levels of industries can be influenced by factors such as industry structure, market conditions, and external events. Therefore, during any time period, the risk levels of different industries can indeed vary within wide ranges. Statement E is a true statement concerning industry analysis.

In summary, the statement that is not true concerning industry analysis is:

A. Industries that perform well in one time period will continue to outperform the aggregate market in subsequent time periods.