Which of the Following Statements Is False

question 105

Multiple Choice

Which of the following statements is false?

• A) Diversification cannot eliminate risk that is inherent in the macro economy or market risk.
• B) The expected rate of return on a portfolio depends on the correlation between the return on each stock.
• C) Although gold is a risky investment by itself, including gold in a stock portfolio may reduce total risk of the portfolio.
• D) Using the concept of correlation in a portfolio can reduce risk.

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Definitions:

Electronic Devices

Gadgets or mechanisms that use electricity to perform a wide range of functions, from computing to communication.

Violating

The act of breaking or failing to comply with a rule, agreement, or law.

Interlocking Relationships

A situation where members of a company's board of directors are also members of the board of another company, potentially leading to conflicts of interest or anticompetitive practices.

Common Good

refers to what is beneficial or advantageous to all members of a given community or society, encompassing values, policies, and practices that prioritize the welfare of the collective over individual interests.