Final answer:
The statement about nondiversifiable risks being correlated is true, as these risks, also known as systemic risks, tend to cause correlated gains or losses across different assets within a market when they occur.
Step-by-step explanation:
The statement, "Nondiversifiable risks are correlated; their gains or losses tend to occur simultaneously rather than randomly," is True. Nondiversifiable risks, also known as systemic or market risks, refer to the occurrence of economic risks over which individuals have little control, such as natural disasters, wars, or widespread economic downturns. Because these events affect the entire market, the gains or losses they cause tend to be correlated across different investments and sectors, meaning they happen at the same time for many different assets, rather than occurring randomly for each asset.
The concept that correlation does not imply causation is important to understand, especially in scientific studies. For example, a positive correlation between two variables simply means that they tend to move in the same direction but does not necessarily mean one variable causes the other to change. Similarly, a P-value of 0.03 in a scientific study does not definitively prove that the observed difference is not due to chance, but it does suggest that the difference is likely to be statistically significant and not likely occurring by chance alone, as there's only a 3% probability that the difference is due to random variation.