Which of the Following Statements Is FALSE

question 5

Multiple Choice

Which of the following statements is FALSE?

• A)The expected return of a portfolio is equal to the weighted average expected return,but the volatility of a portfolio is less than the weighted average volatility.
• B)Each security contributes to the volatility of the portfolio according to its volatility,scaled by its covariance with the portfolio,which adjusts for the fraction of the total risk that is common to the portfolio.
• C)Nearly half of the volatility of individual stocks can be eliminated in a large portfolio as a result of diversification.
• D)The overall variability of the portfolio depends on the total co-movement of the stocks within it.

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Definitions:

Creativity

The ability to generate or recognize ideas, alternatives, or possibilities that may be useful in solving problems, communicating with others, and entertaining ourselves and others.

Novel Solutions

Refers to unique and creative answers or approaches to problems that have not been previously considered.

Functional Fixedness

A cognitive bias that limits a person to using an object only in the way it is traditionally used, hindering problem-solving and creativity.

Genetic Problems

Disorders or diseases that are caused by abnormalities in an individual's DNA or chromosomes.