Which of the following statements is false?
A)diversification cannot eliminate risk that is inherent in the macroeconomy or market risk.
B)the expected rate of return on a portfolio does not depend on the correlation between the return on each stock.
C)although gold is a risky investment by itself, including gold in a stock portfolio may reduce total risk of the portfolio.
D)all of the above statements are correct.

Question

Quizplus · Accepted Answer

Statement D is false because not all the statements are correct. Statement B is false because the expected rate of return on a portfolio does depend on the correlation between the returns of the stocks in the portfolio.

Which of the Following Statements Is False