Which of the Following Statements Is FALSE

question 121

Multiple Choice

Which of the following statements is FALSE?

• A)Stock returns will tend to move together if they are affected similarly by economic events.
• B)Stocks in the same industry tend to have more highly correlated returns than stocks in different industries.
• C)Almost all of the correlations between stocks are negative,illustrating the general tendency of stocks to move together.
• D)With a positive amount invested in each stock,the more the stocks move together and the higher their covariance or correlation,the more variable the portfolio will be.

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Definitions:

Quality Cost Report

An analysis that quantifies the total costs associated with ensuring and maintaining the quality of products or services, including prevention, appraisal, and failure costs.

Eagleson Company

A fictional name frequently used in business examples or case studies to represent a company.

Appraisal Cost

Costs associated with the evaluation and inspection of purchased materials and finished products to ensure quality requirements are met.

Quality Cost Report

A document detailing the costs associated with ensuring product quality, including prevention, appraisal, and failure costs.