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:

Immediate Experience

Direct, unmediated interaction with the environment or a situation.

Trained Introspectors

Individuals who have been trained to carefully examine and report on their own thoughts and feelings.

Wilhelm Wundt

A German psychologist who is considered the father of experimental psychology; he founded the first psychological laboratory.

Practice Observations

The act of repeatedly watching or monitoring phenomena to gain expertise or collect data in a particular field.