Which of the Following Statements Is FALSE

question 68

Multiple Choice

Which of the following statements is FALSE?

• A)A stock's return is perfectly positively correlated with itself.
• B)When the covariance equals 0,the stocks have no tendency to move either together or in opposition of one another.
• C)The closer the correlation is to -1,the more the returns tend to move in opposite directions.
• D)The variance of a portfolio depends only on the variance of the individual stocks.

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Definitions:

Modern Environment

The contemporary physical, social, economic, and political surroundings in which individuals or societies exist.

Laws Of Probability

The mathematical rules that describe the likelihood of certain events occurring, which govern random events and can predict the outcomes of complex systems.

Gambler's Fallacy

The false notion that if an event takes place more often than usual over a certain span, its occurrence will diminish in the future, or the contrary.

Availability Heuristic

A quick judgment method drawn from examples that surface quickly in one's thoughts when deliberating over a specific area, theory, approach, or verdict.