The Accountants at Global Finances Can Take Work Home for as Many

question 85

Multiple Choice

The accountants at Global Finances can take work home for as many days as they like as long as their spreadsheets are up to date and accurate. This scenario illustrates that Global Finances uses _____.

• A) self-control
• B) concertive control
• C) bureaucratic control
• D) normative control

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Definitions:

Information Ratio

A ratio used to measure the return of a portfolio or fund relative to its risk, often used to assess the skill of a portfolio manager.

Risk-Free Return

The theoretical return attributed to an investment with zero risk, typically associated with government bonds.

Jensen Portfolio

A portfolio evaluated using Jensen's Alpha, which measures the excess return of the portfolio over the predicted return by the CAPM model for its level of risk.

Treynor Measures

Financial metrics used to assess the returns earned on a portfolio in excess of that which could have been earned on a risk-free investment, per each unit of market risk.