The Best Way to Measure Adherence to the Objectives of Money

question 7

Multiple Choice

The best way to measure adherence to the objectives of money managers and the financial needs of investors is:

• A)to calculate the total returns on the portfolios that they manage.
• B)to evaluate the risk exposure that the fund manager has accepted.
• C)to calculate the dividend income that the portfolio has achieved.
• D)to calculate the capital gains that the portfolio has achieveD.The objectives should be set with an eye toward the capabilities of the money managers and the financial needs of the investors.The best way to measure adherence to these objectives is to evaluate the risk exposure the fund manager has accepted.

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Definitions:

Lower-order Needs

Basic physiological and safety needs at the bottom levels of Maslow’s hierarchy, which must be satisfied before higher-level needs can be addressed.

Maslow

Refers to Abraham Maslow, a psychologist known for creating Maslow's hierarchy of needs, a theory in psychology that prioritizes human needs from basic to self-fulfillment.

Physiological

Relating to the functions and processes that occur within living organisms, especially in terms of how they support life and health.

Esteem

The regard in which an individual or entity is held by others; often related to respect and admiration.