Which of the Following Statements Is FALSE

question 31

Multiple Choice

Which of the following statements is FALSE?

• A)While the sign of the correlation is easy to interpret,its magnitude is not.
• B)Independent risks are uncorrelated.
• C)When the covariance equals 0,the returns are uncorrelated.
• D)To find the risk of a portfolio,we need to know more than the risk and return of the component stocks;we need to know the degree to which the stocks' returns move together.

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