Use the Table for the Question(s)below

question 89

Multiple Choice

Use the table for the question(s) below.
Consider the following covariances between securities:
-Which of the following statements is FALSE?

• A)When stocks are perfectly positively correlated,the set of portfolios is identified graphically by a straight line between them.
• B)An investor seeking high returns and low volatility should only invest in an efficient portfolio.
• C)When the correlation between securities is less than 1,the volatility of the portfolio is reduced due to diversification.
• D)Efficient portfolios can be easily ranked,because investors will choose from among them those with the highest expected returns.

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Definitions:

Percentage Of Increase

A measure expressed as a percentage that reflects the rise in value or quantity of something compared to its previous value.

Horizontal Analysis

A financial analysis technique that evaluates changes in financial statement line items over a series of reporting periods.

Vertical Analysis

A method in financial accounting where each entry in a financial statement is listed as a percentage of a base figure, facilitating the comparison of financial statements over different periods.

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects revenue by comparing net credit sales to the average accounts receivable.