Covariances Between Security Returns Tend to Be

question 9

Multiple Choice

Covariances between security returns tend to be

• A) positive because of SEC regulations.
• B) positive because of Exchange regulations.
• C) positive because of economic forces that affect many firms.
• D) negative because of SEC regulations.
• E) negative because of economic forces that affect many firms.

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Definitions:

Generally Accepted Accounting Principles

A framework of accounting standards, principles, and procedures that companies must follow when compiling their financial statements in the U.S.

Statement of Stockholders' Equity

A financial statement showing the changes in the value of a company's equity over a specific period, due to earnings, losses, and dividends.

Corporation's Board of Directors

A group of individuals elected by shareholders to oversee the management and make major decisions for a corporation.