Which of the Following Statements Is FALSE

question 50

Multiple Choice

Which of the following statements is FALSE?

• A)Because the prices of shares do not move identically, some of the risk is averaged out in a portfolio.
• B)The covariance and correlation allow us to measure the co-movement of returns.
• C)The amount of risk that is eliminated in a portfolio depends on the degree to which the shares face common risks and their prices move together.
• D)Correlation is the expected product of the deviations of two returns.

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Definitions:

Monthly Income

The total amount of income received on a monthly basis from all sources.

Price

The financial sum expected, necessary, or handed over in exchange for something.

Monthly Income

The total amount of money received by an individual or household within a month from all sources.

Hot Dog

A cooked sausage, traditionally grilled or steamed and served in a sliced bun.