If an Investor Wishes to Better Diversify Her Investment Portfolio,which

question 38

True/False

If an investor wishes to better diversify her investment portfolio,which consists of the common stocks of many of the firms that are in the Dow Jones Industrial Average,she probably should invest in some companies that are in those industries that are classified as countercyclical,or defensive.

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Definitions:

Variable Administrative Expense

Costs that vary with changes in the level of an organization's activity, related to administrative functions.

Contribution Margin

The revenue remaining after subtracting variable costs, which can then be used to cover fixed expenses and provide profit.

Incremental Manufacturing Cost

The additional cost associated with manufacturing one more unit of a product, encompassing additional materials, labor, and overhead costs.

Fixed Cost

Costs that remain unchanged regardless of the level of production or sales activities within a certain range and period.