Consider the Theory of Active Portfolio Management

question 14

Multiple Choice

Consider the theory of active portfolio management. Shares A and B have the same beta and the same positive alpha. Share A has higher non-systematic risk than share B. You should want ________ in your active portfolio.

• A)equal proportions of shares A and B
• B)more of Share A than Share B
• C)more of Share B than Share A
• D)more information is needed to answer this question

Describe the major components of emotions and the role of neurotransmitters and brain structures in emotional processes.

Understand the concept of average daily float and its calculation in various scenarios.

Comprehend the concept of collection and disbursement floats and their impact on firm's cash management.

Apply the BAT and Miller-Orr models to determine optimal cash balance strategies.

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Definitions:

Discretionary Fiscal Policy

Government policy involving the use of government spending and taxation levels to influence the economy, based on current conditions.

Entitlement Programs

Government programs that guarantee certain benefits to a particular group or segment of the population, such as Social Security or Medicare in the United States.

Presidential Discretion

The authority and freedom of action granted to the President in areas not explicitly defined by the constitution or statutes, often in the context of national security or foreign policy.

Transfer Payments

Payments made by the government to individuals through various social benefit programs, without any goods or services being received in return.