Portfolio Theory as Described by Markowitz Is Most Concerned with

question 55

Multiple Choice

Portfolio theory as described by Markowitz is most concerned with

• A) the elimination of systematic risk.
• B) the effect of diversification on portfolio risk.
• C) the identification of unsystematic risk.
• D) active portfolio management to enhance returns.

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Definitions:

CCA

Capital Cost Allowance; a tax deduction in Canada for the depreciation of tangible property.

Earnings Before Interest And Taxes

A measure of a firm's profit that includes all income and expenses except interest and income tax expenses.

Retained Earnings

The portion of a company's profits that is kept or retained rather than distributed to shareholders or owners as dividends.

Net New Equity

The amount of equity capital a company raises through the issuance of new shares minus any shares it has bought back, reflecting the net increase in share capital.