Which of the Following Statements Is FALSE

question 86

Multiple Choice

Which of the following statements is FALSE?

• A)If two stocks move in opposite directions,one will tend to be above average when the other is below average,and the covariance will be negative.
• B)The correlation between two stocks has the same sign as their covariance,so it has a similar interpretation.
• C)The covariance of a stock with itself is simply its variance.
• D)The covariance allows us to gauge the strength of the relationship between stocks.

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