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.

---

Definitions:

Manufacturing Overhead

All manufacturing costs that are not directly associated with the production of goods, such as utilities, rent, and salaries for managers.

Direct Materials

The raw materials that can be physically and directly associated with manufacturing the end product.

Factory Overhead

All indirect costs associated with the production process, such as salaries for supervisors and costs for utilities, not directly attributed to specific units of products.

Mixed Cost

A cost that contains both variable and fixed cost elements, making it partially dependent on the level of output or activity.