Which of the Following Statements Is False

question 89

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 of 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:

Accounting Procedures

Systematic methods or processes followed in the preparation, maintenance, and auditing of financial records and statements.