Which of the Following Statements Is False

question 101

Multiple Choice

Which of the following statements is false?

• A) While the sign of the correlation is easy to interpret, its magnitude is not.
• B) Independent risks are uncorrelated.
• C) When the covariance equals 0, the returns are uncorrelated.
• D) To find the risk of a portfolio, we need to know more than the risk and return of the component stocks; we need to know the degree to which the stocks' returns move together.

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Definitions:

Federal Government

The national government of a federated state, which holds the supreme legislative, executive, and judicial power over a country.

Net Income

The total earnings of a company after all expenses and taxes have been deducted from total revenue.

Social Security Administration

The Social Security Administration is a U.S. government agency responsible for administering social insurance programs, including retirement, disability, and survivors' benefits.

Rate Of Return

A measure of the profitability of an investment, calculated as a percentage of the original investment.