Which of the Following Statements Is FALSE

question 25

Multiple Choice

Which of the following statements is FALSE?

• A)The covariance of a share with itself is simply its variance.
• B)If two shares move in opposite directions, one will tend to be above average when the other is below average, and the covariance will be negative.
• C)The covariance allows us to gauge the strength of the relationship between shares.
• D)The correlation between two shares has the same sign as their covariance, so it has a similar interpretation.

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Definitions:

Deseasonalize

The process of removing seasonal effects from a time series to better identify trends.

Seasonal Indexes

Quantitative measures that represent how a seasonal pattern affects the data over a specific period, often used in time series analysis to adjust predictions for seasonal effects.

Time Series

A continuous chain of data points, often resulting from measurements taken one after another within a certain timeframe.

Forecasting Models

Quantitative and qualitative techniques used to predict future events or data points based on historical trends and patterns.