Which of the Following Statements Concerning Active Equity Portfolio Management

question 29

Multiple Choice

Which of the following statements concerning active equity portfolio management strategies is true?

• A) The goal of active equity portfolio management is to earn a portfolio return that exceeds the return of a passive benchmark portfolio (net of transaction costs) on a risk-adjusted basis.
• B) An actively managed equity portfolio has lower total transaction costs.
• C) An actively managed equity portfolio has lower risk than the passive benchmark.
• D) A key to success for an actively managed equity portfolio is to maximize trading activity.
• E) All of the above

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Definitions:

Checks And Balances

A system in which the different parts of an organization or government have powers that affect and control the other parts so that no part can become too powerful.

Thomas-Kilman Conflict Model

A model that outlines five conflict-handling modes to assess how individuals deal with conflicts: avoiding, accommodating, competing, compromising, and collaborating.

Competitor

An individual or organization that is a rival against others in the same industry or field, striving for the same goals such as market share.

Confrontational

Being confrontational refers to a tendency to challenge or oppose others directly and aggressively.