Which of the Following Statements Is FALSE

question 60

Multiple Choice

Which of the following statements is FALSE?

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

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Definitions:

Special Interest Effect

The impact of interest groups or individual stakeholders in influencing government policy to benefit a small, specific group at the expense of the general public.

Large Group

A sizable collection of individuals or entities that share a common characteristic or are engaged in a common activity.

Smaller Group

A subset of a larger population or collection, typically characterized by fewer members or lesser size.

Parity Ratio

A metric often used in agriculture and economics to compare the relative value of one commodity or currency to another, based on a standard or base period.