Which of the Following Statements Is False

question 60

Multiple Choice

Which of the following statements is false?

• A) The volatility declines as the number of stocks in a portfolio grows.
• B) An equally weighted portfolio is a portfolio in which the same amount is invested in each stock.
• C) As the number of stocks in a portfolio grows large, the variance of the portfolio is determined primarily by the average covariance among the stocks.
• D) When combining stocks into a portfolio that puts positive weight on each stock, unless all of the stocks are uncorrelated with the portfolio, the risk of the portfolio will be lower than the weighted average volatility of the individual stocks.

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Definitions:

International Family Planning

Efforts and policies aimed at allowing families worldwide to plan and achieve their desired number of children and spacing of pregnancies through access to information and contraception methods.

Executive Privilege

Executive privilege is the power claimed by the president of the United States and other members of the executive branch to resist certain subpoenas and other interventions by the legislative and judicial branches of government to access information and personnel relating to the executive branch.

Executive Order

A directive issued by the president of the United States that manages operations of the federal government and has the force of law.

Executive Orders

Directives issued by the U.S. President that manage operations of the federal government.