Which of the Following Statements Is False

question 7

Multiple Choice

Which of the following statements is false?

• A) The covariance and correlation allow us to measure the co-movement of returns.
• B) Correlation is the expected product of the deviations of two returns.
• C) Because the prices of the stocks do not move identically, some of the risk is averaged out in a portfolio.
• D) The amount of risk that is eliminated in a portfolio depends on the degree to which the stocks face common risks and their prices move together.

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Definitions:

Bipedalism

The ability to walk on two legs, a characteristic feature of humans and our ancestors that allows for a range of motion and energy efficiency.

Hominids

A family of primates that includes humans, their ancestors, and other extinct related species, characterized by bipedalism, large brains, and complex behavior.

Cerebrum

A large, convoluted subdivision of the vertebrate brain; in humans, it functions as the center for learning, voluntary movement, and interpretation of sensation.

Primates

An order of mammals including humans, apes, monkeys, and prosimians, characterized by large brains, forward-facing eyes, and complex social behaviors.