Which of the Following Is Not Correct

question 46

Multiple Choice

Which of the following is not correct?

• A)A risk averse person might be willing to hold stocks.
• B)Other things the same,a portfolio with the stocks of a large number of companies has less risk.
• C)Other things the same,the larger a portion of savings a person invests in stocks,the greater his expected return.
• D)Diversification can eliminate market risk but not firm-specific risk.

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Definitions:

Linear Regression

A statistical method for modeling the relationship between a dependent variable and one or more independent variables by fitting a linear equation to observed data.

Interpolation

To predict corresponding variables within the domain.

Extrapolation

To predict corresponding variables outside of the domain.

Regression Line

In statistics, a line that best fits a set of data points, reflecting the relationship between an independent variable and a dependent variable.