Which of the Following Statements Is FALSE

question 15

Multiple Choice

Which of the following statements is FALSE?

• A) Stock returns will tend to move together if they are affect 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 invest 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:

Profitability Strategy

A business approach focused on increasing net income through revenue enhancement, cost reduction, or both.

Breakeven Analysis

A financial calculation to determine the point at which revenue received equals the costs associated with receiving the revenue, thus no net loss or gain is incurred.

Company's Costs

Company's costs refer to the various expenses a company incurs in its operations, including production, marketing, and administrative expenses.

Level of Sales

This term refers to the total volume or value of sales achieved by a company, product, or service over a specific period, indicating its market performance.