Which of the Following Statements Is FALSE

question 24

Multiple Choice

Which of the following statements is FALSE?

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

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Definitions:

Conditioned Response

A learned reaction to a previously neutral stimulus that has become associated with an unconditioned stimulus through conditioning.

Conditional Reinforcement

Conditional reinforcement is the process by which a stimulus reinforces a behavior only when it is paired with a primary reinforcer or another strong reinforcer.

Contingent Reflex

A reflex action that depends on specific conditions or stimuli to occur, rather than happening automatically.

Conditioned Stimulus

A stimulus that initially does not elicit a specific response but comes to do so after being associated with an unconditioned stimulus.