Which of the following statements is false? a. the variance of a portfolio depends only on the variance of the individual stocks. b. when the covariance equals 0, the stocks have no tendency to move either together or in opposition of one another. c. the closer the correlation is to minus1, the more the returns tend to move in opposite directions. d. a stock's return is perfectly positively correlated with itself.

Brian has just finished college. he wants to set up a small business to make and sell fireworks. he registers his company and acquires a license from the government. he finds that most of his competitors are selling fireworks at an extremely low price. he would like to make more money, so he decides to innovate and develop better fireworks. he sells his fireworks at a higher price, and they are a huge hit with the customers. after a few years, he earns enough profit to set up a bigger fireworks factory that complies with the government’s health and safety regulations. he even starts exporting fireworks overseas. which type of economy does this scenario describe?