Which of the Following Statements Is False

question 62

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 invest in each stock, the more the stocks move together and the higher their covariance or correlation, the more variable the portfolio will be.

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Definitions:

Harshness

The quality of being extremely strict or severe in conditions or treatment.

Perceptual Biases

Cognitive biases that result from the simplification of processing social realities, often leading to distorted interpretations.

Central Tendency

The tendency to assign most ratees to middle-range job performance categories.

Halo Effect

A cognitive bias where the perception of one positive trait influences the perception of other traits.