Final answer:
False. A firm's beta can change even if it stays in the same industry.
Step-by-step explanation:
The statement, 'If a firm stays in the same industry, its beta will never change,' is False. Beta is a measure of a stock or a company's sensitivity to market movements. It indicates how much the stock price of a company tends to move compared to the overall market. While a firm operating in the same industry may have a relatively stable beta, it is not guaranteed to stay constant.
Because beta is affected by factors such as changes in market conditions, economic trends, and firm-specific risks, it can fluctuate over time. For example, if there are significant changes in the industry or the firm's operations, its beta may change. Additionally, if the firm takes on new projects or enters new markets, it can impact the company's risk profile and consequently alter its beta. Therefore, a firm's beta can change even if it stays within the same industry.