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.

---

Definitions:

Producer Surplus

Is the difference between the amount producers are willing to accept for a product or service and the actual amount they receive.

Sellers' Costs

The expenses incurred by sellers in providing goods or services, including production, labor, and materials costs.

Good

A tangible product or item that satisfies some human want or need, which can be transferred or sold from one person to another.

Profits And Losses

A financial metric indicating the positive (profits) or negative (losses) financial outcomes of a business's operations.