Which of the Following Statements Is FALSE

question 84

Multiple Choice

Which of the following statements is FALSE?

• A)The closer the correlation is to -1, the more the returns tend to move in opposite directions.
• B)A share's return is perfectly positively correlated with itself.
• C)The variance of a portfolio depends only on the variance of the individual shares.
• D)When the covariance equals 0, the shares have no tendency to move either together or in opposition of one another.

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Definitions:

Incentive

A motivational factor or reward that encourages a person or group to act in a certain way or achieve higher levels of performance.

Gain-sharing

A performance-related pay strategy that offers employees financial rewards based on improvements in the company's productivity or performance.

Productivity

The efficiency at which goods or services are produced relative to the input used.

Costs

The amount of money required to purchase something or the expenditure involved in the producing, maintaining, or providing of a service.