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:

High-Impedance Path

A circuit path that has a relatively high resistance to current flow, often affecting signal quality or energy transfer efficiency.

Bleeder Resistor

A bleeder resistor is a safety component used in electrical circuits to discharge residual power from capacitors to prevent electric shock or damage to other circuit components when power is turned off.

Module Leakage Current

The small electrical current that flows through a module or device when it is supposed to be off, typically due to imperfect insulation or circuit design.

Ground Loop Circuits

Electrical circuits that inadvertently create a loop, often causing interference due to differences in ground potential.