An Innovator May Fail to Earn Any Significant Returns from an Innovation

question 33

Multiple Choice

An innovator may fail to earn any significant returns from an innovation if:

• A)The innovation fails to create value for users
• B)The innovator is unable to appropriate the value the innovation creates
• C)Both (a)and (b)are present
• D)If either (a)or (c)is present.

---

Definitions:

Portfolio Theory

A framework for building an investment portfolio that aims to maximize returns by taking a specified amount of market risk.

Markowitz

Refers to Harry Markowitz, an economist known for his pioneering work in modern portfolio theory and investment diversification.

Systematic Risk

The type of risk inherent to the entire market or an entire market segment, also known as market risk, which cannot be eliminated through diversification.

Diversification

An investment strategy that spreads exposure across various assets to reduce risk.