Which of the Following Statements Is FALSE

question 109

Multiple Choice

Which of the following statements is FALSE?

• A)The maximum benefits to diversification between securities occur when they are perfectly positively correlated.
• B)The maximum benefits to diversification between securities occur when they are perfectly negatively correlated.
• C)There is some benefit to diversification when the correlation between securities is 0.0.
• D)There is some benefit to diversification when the correlation between securities is greater than 0.0 but less than 1.0.

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Definitions:

Gross Profit

The financial metric representing the difference between sales revenue and the cost of goods sold before deducting administrative and selling expenses.

Product Costs

Product costs include all costs directly associated with the production of goods, including raw materials, direct labor, and manufacturing overhead.

Expenditures

Outflows of cash or other valuable assets from a person or company to pay for goods or services.

Finished Products

Items or goods that have completed all stages of production and are ready for sale to customers.