Important Provisions of the Sarbanes-Oxley Act

question 158

Multiple Choice

Important provisions of the Sarbanes-Oxley Act

• A) approve corporate loans to directors of the company.
• B) encourage the destruction of financial documents.
• C) require the CEO and CFO of corporations to certify the accuracy of financial reports.
• D) encourage outside CPA firms to deliver several services to their clients, including auditing services and consulting services.

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Definitions:

Sharpe Measure

A financial metric used to measure the performance of an investment compared to its risk, indicating how much excess return you are receiving for the extra volatility endured by holding a riskier asset.

Mean-Variance Analysis

Evaluation of risky prospects based on the expected value and variance of possible outcomes.

Treynor-Black Model

A portfolio optimization model that blends passive and active management strategies to maximize returns above the market's performance.

Active Portfolio

An active portfolio involves strategic buying and selling of stocks or other securities, managed by analysts or fund managers, aiming to outperform the market average or a benchmark index.