Which of the Following Statements Is FALSE

question 34

Multiple Choice

Which of the following statements is FALSE?

• A)Fluctuations of a stock's returns that are due to firm-specific news are common risks.
• B)The volatility in a large portfolio will decline as the size of the portfolio increases until only the systematic risk remains.
• C)When we combine many stocks in a large portfolio,the firm-specific risks for each stock will average out and be diversified.
• D)The risk premium of a security is determined by its systematic risk and does not depend on its diversifiable risk.

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Definitions:

Red Nucleus

A structure located in the rostral midbrain involved in motor coordination.

Intention Tremors

A type of tremor that becomes more pronounced when a person attempts to perform a voluntary movement, often associated with disorders of the cerebellum.

Extrapyramidal System

A neural network in the brain that is part of the motor system causing involuntary reflexes and movement control.

Skilled Movements

Movements that require coordination and precision, often learned through practice, involving specific brain regions such as the cerebellum and motor cortex.