Which of the Following Statements Is False

question 66

Multiple Choice

Which of the following statements is false?

• A) Dividing the covariance by the volatilities ensures that correlation is always between -1 and +1.
• B) Volatility is the square root of variance.
• C) The closer the correlation is to 0, the more the returns tend to move together as a result of common risk.
• D) If two stocks move together, their returns will tend to be above or below average at the same time, and the covariance will be positive.

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Definitions:

Strict Liability

A legal standard that holds parties responsible for damages or injuries caused by their actions or products, regardless of fault or intent.

Unreasonably Dangerous Products

Products that pose a risk of injury to the consumer beyond what would be expected through typical use.

Construction Projects

Planned undertakings involving the erection, renovation, or demolition of a structure or infrastructure.

Causation Link

The relationship or connection between an act and its effect, often used in legal contexts to establish liability or fault by demonstrating how one event directly leads to another.