With Regard to the OIP

question 27

Multiple Choice

With regard to the OIP,

• A)the composition of the optimal international portfolio is identical for all investors, regardless of home country.
• B)the composition of the optimal international portfolio varies depending upon the numeraire currency used to measure returns.
• C)the composition of the optimal international portfolio is identical for all investors, regardless of home country, if they hedge their risk with currency futures contracts.
• D)both b) and c)

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Definitions:

Periodic Inventory System

An inventory system in which the inventory count and the cost of goods sold calculation are performed at set intervals, typically at the end of an accounting period.

Periodic Inventory System

An inventory accounting system where updates are made on a periodic basis, rather than continuously, often used for calculating cost of goods sold at the end of an accounting period.

Sales Returns & Allowances

Reductions in sales revenue for products returned by customers or allowances given for damaged goods.

Merchandise Inventory

Goods that a company holds for the purpose of selling to customers in the ordinary course of business.