Important Reasons for Constructing a Policy Statement Include

question 40

Multiple Choice

Important reasons for constructing a policy statement include:

• A) Helps investors decide on realistic investment goals
• B) Create a standard by which to judge the performance of the portfolio manager
• C) Develop an instrument to judge risk
• D) Choices a and b
• E) All of the above

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Definitions:

Net Before-Tax Operating Income

Earnings generated from a company's core business operations before taxes and non-operating costs are deducted.

Net Fixed Assets

The total value of a company’s property, plant, and equipment minus depreciation, representing the tangible assets used in operations.

Income Statements

A financial statement that shows a company's revenues, expenses, and net income over a specific period of time.

Annual Basis

This term usually refers to the accounting or financial evaluation of certain activities, income, or expenses projected or calculated over the span of a year.