Which of the Following Statements Is False

question 39

Multiple Choice

Which of the following statements is false?

• A) A stock's return is perfectly positively correlated with itself.
• B) When the covariance equals 0, the stocks have no tendency to move either together or in opposition to one another.
• C) The closer the correlation is to -1, the more the returns tend to move in opposite directions.
• D) The variance of a portfolio depends only on the variance of the individual stocks.

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Definitions:

Natural Environment Type Phobia

An intense, irrational fear of situations or elements in the natural environment, such as storms or heights.

Freudian Theory

A set of psychoanalytic theories developed by Sigmund Freud, emphasizing unconscious processes, childhood experiences, and sexual desires in shaping behavior.

Unconscious Anxiety

Anxiety that resides outside of conscious awareness, often manifesting through physical symptoms or behaviors.

Ego

Part of the psyche that channels libido to be acceptable to the superego and within the constraints of reality.