Which of the Following Statements Is FALSE

question 77

Multiple Choice

Which of the following statements is FALSE?

• A)The variance of a portfolio is equal to the weighted average correlation of each stock within the portfolio.
• B)The variance of a portfolio is equal to the sum of the covariances of the returns of all pairs of stocks in the portfolio multiplied by each of their portfolio weights.
• C)The variance of a portfolio is equal to the weighted average covariances of each stock within the portfolio.
• D)The volatility declines as the number of stocks in a portfolio grows.

---

Definitions:

Prospectus

A public document disclosing relevant information about a corporation.

Expected Performance

Refers to the anticipated fulfillment of contractual obligations by the involved parties.

Internal Document

A document intended for use within a particular organization or group, not for public distribution.

Separate Legal Entity

A business structure that is recognized as distinct from its owners, with its own legal rights and obligations.