Which of the Following Statements Is FALSE

question 101

Multiple Choice

Which of the following statements is FALSE?

• A)Dividing the covariance by the volatilities ensures that correlation is always between -1 and +1.
• B)Volatility is the square root of variance.
• C)The closer the correlation is to 0,the more the returns tend to move together as a result of common risk.
• D)If two stocks move together,their returns will tend to be above or below average at the same time,and the covariance will be positive.

---

Definitions:

Market Price

The current price at which an asset or service can be bought or sold in a particular market.

Improve Conditions

Actions or initiatives aimed at enhancing the situation, environment, or well-being of individuals, communities, or systems.

Short Run

A period in economics during which at least one input (like plant size) is fixed and cannot be changed.

Maximum Profit

The highest possible financial gain that can be achieved from the operations of a business after all costs have been subtracted.