If You Find Yourself Checking the Prices of Stocks in Your

question 105

Multiple Choice

If you find yourself checking the prices of stocks in your portfolio on an hourly basis and you are not a day trader, the most likely cause is

• A) the market risk of your stocks.
• B) the business risk of the management of your companies.
• C) the low risk tolerance you have to owning stock.
• D) the political risk of what Congress might do.

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Definitions:

Variable Cost

Expenses that vary depending on the amount of products or services a company generates.

Sensitivity Analysis

A technique designed to analyze the effect that varied values of an independent variable exhibit on a particular dependent variable, considering certain presuppositions.

NPV Estimates

Predicted calculations of Net Present Value, which assesses the worth of a project or investment by discounting its future cash flows to their present value.

Dynamic Balance

The balance status of a moving object. For instance, it is common to dynamically balance a truck tire and wheel assembly.