Which of the Following Statements Is False

question 55

Multiple Choice

Which of the following statements is false?

• A) Stock returns will tend to move together if they are affect similarly by economic events.
• B) Stocks in the same industry tend to have more highly correlated returns than stocks in different industries.
• C) Almost all of the correlations between stocks are negative, illustrating the general tendency of stocks to move together.
• D) With a positive amount invested in each stock, the more the stocks move together and the higher their covariance or correlation, the more variable the portfolio will be.

Understand the concept of complements and substitutes and their impact on demand.

Learn how consumer expectations about future prices or events affect current demand.

Grasp the importance of market responses to changes in complementary and substitute goods’ prices.

Discriminate between changes in quantity demanded versus changes in demand.