Over the Past 10 Years, Gordon Has Maintained His Portfolio

question 18

Multiple Choice

Over the past 10 years, Gordon has maintained his portfolio as 40% bonds and 60% stocks. The strategy Gordon has followed over this period is best described as:

• A) constant proportion portfolio insurance (CPPI).
• B) buy-and-hold.
• C) constant mix.
• D) portfolio optimization.

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Definitions:

Net Assets

The total assets of an organization minus its total liabilities, representing the owners' residual interest in the company's assets.

Financial Flexibility

The ability of an entity to initiate actions and adapt to changes in its financial operations that maximize shareholders' value over time.

Resource Structure

The composition and allocation of resources within an organization or economy, including human, financial, and material resources.

Financial Structure

The mix of debt and equity that a company uses to finance its operations and growth.