Which Statement Is False Concerning the Different Observation Methods

question 36

Multiple Choice

Which statement is false concerning the different observation methods?

• A) Observation bias is high in the case of mechanical observation because a human observer is involved.
• B) Mechanical observation can vary widely from low to high structure depending upon on the methods used.
• C) The degree of disguise is low in the case of audits, as it is difficult to conceal the identity of auditors.
• D) The ability to observe in a natural setting is low in trace analysis because the observation takes place after the behavior has occurred.

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Definitions:

Unsystematic Risk

The danger linked to a certain company or sector that can be reduced by spreading investments across a varied portfolio.

Political Risk

The risk of loss faced by investors, corporations, and governments due to political decisions, unrest, or instability in a country.

Correlation Risk

Correlation risk is the risk of unexpected changes in the correlation between asset returns, affecting portfolio risk and valuation.

Semi-Strong Form

A hypothesis suggesting that all publicly available information is already reflected in stock prices, negating the ability to earn excess returns.