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:

Findspot

The original location where an archaeological artifact was discovered, providing context for its use and significance.

Paleolithic Painting

Prehistoric artworks found on cave walls or ceilings, primarily in Europe, dating back to the Paleolithic era, showcasing animals, human figures, and abstract signs.

Entrance

An opening, such as a door, passage, or gate, that allows access to a place.

Well Shaft

A vertical passage used in mining or for accessing underground water.