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Which of the following statements is FALSE? Volatility is the square root of variance. Dividing the covariance by the volatilities ensures that correlation is always
Which of the following statements is FALSE? Volatility is the square root of variance. Dividing the covariance by the volatilities ensures that correlation is always between - 1 and +1. If two stocks move together, their returns will tend to be above or below average at the same time, and the covariance will be positive. The closer the correlation is to 0, the more the returns tend to move together as a result of common risk
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