Which of the Following Statements Is FALSE

question 97

Multiple Choice

Which of the following statements is FALSE?

• A)The covariance and correlation allow us to measure the co-movement of returns.
• B)Correlation is the expected product of the deviations of two returns.
• C)Because the prices of the stocks do not move identically,some of the risk is averaged out in a portfolio.
• D)The amount of risk that is eliminated in a portfolio depends on the degree to which the stocks face common risks and their prices move together.

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Definitions:

Savings

The concept in psychology referring to the amount of information or learned behavior that is retained and not forgotten over time.

Amnesia

A condition characterized by a partial or total loss of memory, typically caused by brain injury, disease, or psychological trauma.

Relearning

The process of learning material or information for a second time, typically more quickly than the original learning, due to some retention from the first learning experience.

Recognition

The identification of something as being seen, heard, or known previously.