The Unit of Measure That Is Used by Portfolio Managers

question 16

Multiple Choice

The unit of measure that is used by portfolio managers to measure returns for individual securities on a periodic basis is the:

• A)Return on investment (ROI)
• B)Holding period return (HPR)
• C)Geometric mean return
• D)Arithmetic mean return

Analyze the financial impact and suitability of lockbox services for accelerating collections.

Determine the average amount of disbursement float for a firm based on check writing and clearing times.

Apply the Miller-Orr model to find the optimal cash balance limit for a firm.

Calculate the net present value (NPV) of adopting a lockbox system for cash collections.

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Definitions:

Nonrenewable Resources

Natural resources such as coal, oil, and natural gas, that cannot be replenished in a short period of time and will eventually deplete.

Sustainable Resources

Natural resources that are used in a manner that satisfies current needs without compromising the ability of future generations to meet their needs.

Hunger-Related Diseases

Illnesses that result directly or indirectly from insufficient food intake or poor nutritional quality.

Malnutrition

A condition that arises from eating a diet in which nutrients are either not enough or are too much, causing health problems related to undernourishment or overnutrition.