The Purpose of Portfolio Management Is to Increase Both Risk

question 55

True/False

The purpose of portfolio management is to increase both risk and returns.

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Definitions:

Par Value

The nominal value of a bond, share of stock, or coupon as stated by the issuer, often used as a legal face value.

Common Stock

Holding shares in a company grants investors a portion of ownership, allowing them to vote on corporate matters and receive a portion of the profits via dividends.

Additional Paid-in Capital

The amount of equity capital that is invested in a company by shareholders over and above the par value of the shares.

Professional Corporation

A type of corporation typically formed by lawyers, doctors, and other professionals, where the company acts under corporate status but allows its members to maintain professional liability.