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Basic Question 0 of 11
Consider the following statements:
II. Cov(X,X)2 = Var(X)
III. In general, for n securities, one must determine n(n-1)/2 different variances.
IV. The correlation is unitless.
B. II is false but IV is true.
C. I and IV are false.
I. The covariance matrix is always symmetric with regard to its diagonal.
II. Cov(X,X)2 = Var(X)
III. In general, for n securities, one must determine n(n-1)/2 different variances.
IV. The correlation is unitless.
Which of the following is incorrect?
A. Both II and III are false.
B. II is false but IV is true.
C. I and IV are false.
User Contributed Comments 19
| User | Comment |
|---|---|
| vt96 | trick question |
| roninacolyte | very good question |
| tssverma | yes..sometimes it is better to use the elimination process .Like I knew IV is always true and choice C contradicts IV. |
| sunilcfa | Just remembered wat my prof used to tell me.... read the qts properly |
| surob | yeah, tricky one. |
| Mattik | Had it right, but answered wrong....better read the question twice |
| viannie | really sly! especially when it's midnight! |
| CFAonTheBrain | can a question like this be on the exam? |
| Oarona | For sure |
| dcfa | trick question definitely |
| geofin | Most people will know the correct answer but will will choose the wrong answer!!! |
| gill15 | It all makes sense to me except ii. Cov(X,X) = VarX How does Cov(X,X)^2 = VarX |
| gill15 | stupid...thats why all the comments were there.... |
| schweitzdm | This question is ridiculous. |
| ashish100 | @Viannie its literally midnight right now... weird |
| ibrahim18 | What sort of tricky and counter-intuitive question is this? Are we supposed to answer questions from the reverse? |
| EEEEvia | read question properly will definitely avoid unnecessary mistakes.... |
| kingirm | Just wordgames |
| Freddie33 | What does the first one mean? |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
describe the steps in the preparation of direct and indirect cash flow statements, including how cash flows can be computed using income statement and balance sheet data
CFA® 2025 Level I Curriculum, Volume 2, Module 4.