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:

Voluntarism

is a principle or system whereby actions and initiatives are undertaken voluntarily, often in the context of social and charitable endeavors, without coercion or regulatory mandate.

Workplace Equity

Fairness in treatment, opportunities, and advancements for all employees within a workplace, regardless of their personal characteristics or background.

Workplace Change

Modifications to the working environment, processes, or culture within an organization, often aimed at improving efficiency, productivity, or worker satisfaction.

Workplace Efficiency

The extent to which an organization utilizes its resources optimally to produce the highest quantity and quality of goods and services with the least waste.