A Portfolio Manager Should Be Able to Perform All of the Following

question 66

Multiple Choice

A portfolio manager should be able to perform all of the following functions,except

• A) Determine risk-return preferences.
• B) Eliminate systematic risk.
• C) Maintain diversification ensuring a stabilized risk class.
• D) Attempt to derive a risk-adjusted performance that is superior to the market.
• E) Administer the account, keep records and provide timely information.

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Definitions:

Price Elasticity of Demand

A metric that demonstrates the degree to which the demand for a product changes when there is a fluctuation in its price.

Midpoint Formula

A method used in economics and finance to estimate the elasticity of demand by calculating the average percentage change in both quantity demanded and price.

Price Elasticity of Demand

The degree to which the demand for an item is affected by shifts in its price, calculated as the percentage difference in demand over the percentage difference in price.

Sporting Event

An organized competition or activity involving physical exertion and skill in which individuals or teams compete against each other.