Action Taken by One on Behalf of Another Is

question 25

Multiple Choice

Action taken by one on behalf of another is:

• A) agency.
• B) negotiability.
• C) representative capacity.
• D) Identification of principal.

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Definitions:

Expected Return-Beta Relationship

The concept that the expected return of an investment is dependent on its beta, which measures its systemic risk relative to the overall market.

Efficient Frontier

Graph representing a set of portfolios that maximize expected return at each level of portfolio risk.

Market Portfolio

The portfolio encompassing all assets in which each asset is held in proportion to its market value.

Beta

The measure of the systematic risk of a security. The tendency of a security’s returns to respond to swings in the broad market.