Which One of the Following Statements Must Be True

question 23

Multiple Choice

Which one of the following statements must be true?

• A) All securities are projected to have higher rates of return when the economy booms versus when it is normal.
• B) Considering the possible states of the economy emphasizes the fact that multiple outcomes can be realized from an investment.
• C) The highest probability of occurrence must be placed on a normal economy versus either a boom or a recession.
• D) The total of the probabilities of the economic states can vary between zero and 100 percent.
• E) Various economic states affect a portfolio's expected return but not the expected level of risk.

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Definitions:

Professional Bureaucracy

An organizational structure that relies heavily on the expertise and professionalism of its members rather than on strict hierarchies or rules.

Horizontal Specialization

A division of labor where tasks are divided among employees at the same level within an organization, based on skills or expertise.

Mechanistic Structure

A mechanistic structure in an organization is characterized by rigid hierarchy, high levels of formalization, and centralized decision making.

Organic Structure

A flexible and decentralized organizational structure, characterized by low levels of formalization and high levels of employee autonomy, aimed at fostering innovation and adaptability.