Which of the Following Statements Is FALSE

question 95

Multiple Choice

Which of the following statements is FALSE?

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

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Definitions:

Economic Loss

A situation where total costs exceed total revenues, resulting in a negative profit for a business or economy.

Short Run

A period of time during which at least one of a firm's inputs is fixed, affecting the firm's capacity to adjust to demand changes.

Short Run

The short run is a period in economics where at least one factor of production is fixed, limiting the adjustments a firm can make to its inputs.

Average Variable Cost

The total variable cost divided by the quantity of output produced; it shows the cost of producing one more unit of output.