A Portfolio Comprises Two Firms, a and B, with Equal

question 100

True/False

A portfolio comprises two firms, A and B, with equal amounts of money invested in each. If firm A's share price increases and that of firm B decreases, the weight of firm A in the portfolio will increase.

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Definitions:

Lag Time

The period between the initiation of an event or process and when its effects become noticeable or measurable.

CFCs

Chlorofluorocarbons, synthetic compounds used in air conditioning, refrigeration, and as aerosol propellants, known to deplete the ozone layer.

Fixed Asset Turnover Ratio

A financial metric that measures how efficiently a company is using its fixed assets to generate sales.

Cash Ratio

A liquidity ratio that measures a company's ability to pay off its short-term liabilities with its cash and cash equivalents.