Which of the Following Statements Is FALSE

question 57

Multiple Choice

Which of the following statements is FALSE?

• A)The volatility declines as the number of stocks in a portfolio grows.
• B)An equally weighted portfolio is a portfolio in which the same amount is invested in each stock.
• C)As the number of stocks in a portfolio grows large,the variance of the portfolio is determined primarily by the average covariance among the stocks.
• D)When combining stocks into a portfolio that puts positive weight on each stock,unless all of the stocks are uncorrelated with the portfolio,the risk of the portfolio will be lower than the weighted average volatility of the individual stocks.

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Definitions:

Resource Mobilization

The process of gathering and managing resources (financial, human, informational) for the purpose of achieving organizational or group objectives.

Framing Theory

A theory suggesting that how information is presented (framed) influences the choices people make about how to process that information.

Egypt

A country in Northeast Africa, known for its ancient civilization, pyramids, and the Nile River.

Emergent Norm Theory

A theory that suggests norms or behaviors emerge spontaneously in groups in response to shared emotions or events.