Which of the Following Statements Is False

question 71

Multiple Choice

Which of the following statements is false?

• A) If two stocks move in opposite directions, one will tend to be above average when the other is below average, and the covariance will be negative.
• B) The correlation between two stocks has the same sign as their covariance, so it has a similar interpretation.
• C) The covariance of a stock with itself is simply its variance.
• D) The covariance allows us to gauge the strength of the relationship between stocks.

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Definitions:

Destination Country's Wage Rates

Refers to the compensation levels for labor in a country where a business might consider relocating or outsourcing operations.

Original Supply of Labor

The initial quantity of labor available in the market or economy before any shifts in demand or supply.

Domestic Output

The total value of all goods and services produced within a country's borders.

Pre-Migration Labor Force

The characteristics, size, and composition of the labor force of individuals before they migrate from one location to another.