Macro Events Only Are Reflected in the Performance of the Market

question 90

Multiple Choice

Macro events only are reflected in the performance of the market portfolio because:

• A)The market portfolio has no individual firms
• B)Only macro events are tracked by economists
• C)Unique risks have been diversified away
• D)Firm-specific events would be too numerous to list

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Definitions:

Accounting

The systematic process of recording, analyzing, summarizing, and interpreting financial transactions and information.

Equitable Remedy

A judicial order enforcing a party to act or refrain from acting in a certain way, based on principles of fairness.

Specific Performance

A legal action taken to compel a party to carry out the terms of a contract rather than awarding damages for breach of contract.

Injunction

A legal order issued by a court that directs an individual or organization to do or refrain from doing a specific act, used to prevent harm or secure relief.