Mary States That the Two Factors Critical to Her Having

question 22

Multiple Choice

Mary states that the two factors critical to her having a successful vacation are golf course availability and good weather.If Mary insists that golf course availability is three times as important as the weather, what importance weights should be placed on golf course availability and good weather to be used for a multifactor evaluation process?

• A)Golf Weight Weather Weight 0.80 0.20
• B)Golf Weight Weather Weight 0.20 0.80
• C)Golf Weight Weather Weight 0.75 0.25
• D)Golf Weight Weather Weight 0.25 0.75

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Definitions:

Maintenance Margin

The minimum equity an investor must maintain in a margin account after the purchase has been made, to keep the position open.

Initial Margin

The minimum amount of funds required to open a position in the securities market, used as a deposit to cover some of the credit risk of the counterparty.

Stop-Buy Order

A type of stock market order that buys a security once its price ascends to a specific point, usually to limit losses or enter the market at a favorable momentum.

Firm Commitment

An underwriting agreement in which an underwriter buys all the securities from the issuer and resells them to investors.