A Manager in an Investment Center Is Offered a Potential

question 32

Multiple Choice

A manager in an investment center is offered a potential investment that would have an ROA of 15 percent.After the investment,it would make up 20 percent of his total portfolio.Currently,he makes 20 percent on his portfolio,though the company requires only 12 percent.Which of the following is true?

• A)He will make the investment since it is 3 percent greater than the company's required return.
• B)He will make the investment because a larger portfolio is always better than a smaller portfolio.
• C)He will not make the investment because the company prefers 12 percent.
• D)He will not make the investment because it lowers his overall return to 19 percent.

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Definitions:

Workers

Individuals engaged in an occupation, profession, or are employed by an organization.

Organization's Needs

The specific requirements or necessities that an organization needs to fulfill its mission and achieve its goals.

Path-Goal

The Path-Goal Theory is a leadership model that outlines how leaders can motivate their followers to achieve set goals by defining clear paths and removing obstacles.

Episodic Volunteer

An individual who volunteers sporadically or on a temporary basis for events or projects rather than committing to long-term involvement.