Which of the Following Statements Is FALSE

question 55

Multiple Choice

Which of the following statements is FALSE?

• A) The covariance and correlation allow us to measure the co-movement of returns.
• B) Correlation is the expected product of the deviations of two returns.
• C) Because the stocks' prices do not move identically, some of the risk is averaged out in a portfolio.
• D) The amount of risk that is eliminated in a portfolio depends on the degree to which the stocks face common risks and their prices move together.

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Definitions:

Personal Use

Personal use refers to the use of goods or services primarily for individual rather than commercial or professional purposes.

Proceeds

Something that is exchanged for a debtor’s sold collateral.

Secured Party

A lender or creditor who has an interest in the collateral securing a loan or credit agreement.

UCC

Short for Uniform Commercial Code, it is a comprehensive set of laws governing all commercial transactions in the United States.