Managers Should Under No Conditions Take Actions That Increase Their

question 47

True/False

Managers should under no conditions take actions that increase their firm's risk relative to the market, regardless of how much those actions would increase the firm's expected rate of return.

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Definitions:

Foreign Currency Reserve

Refers to the foreign currencies held by a central bank or a monetary authority, used to support its liabilities, stabilize its currency, and finance trade imbalances.

Income

The money received, especially on a regular basis, for work or through investments.

Opportunity Cost

The price paid for not choosing the next most favorable option when deciding or picking between different possibilities.

Term Deposit

A bank deposit with a fixed term and typically a fixed rate of interest, where withdrawal can only occur after the term ends without penalty.