A Competitive Advantage Is Considered to Be a Sustained Competitive

question 46

Multiple Choice

A competitive advantage is considered to be a sustained competitive advantage when the

• A)advantage endures for a long time.
• B)firm is able to spread the advantage to all of its business units.
• C)advantage is very large.
• D)advantage was gained at a low cost.
• E)managers who developed the advantage are still employed at the firm.

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Definitions:

Risk-Free Rate

The theoretical rate of return of an investment with zero risk, typically represented by the yield on government bonds.

Optimal Risky Portfolio

A portfolio of investments that maximizes expected return for a given level of risk by carefully selecting and weighting risky assets.

Expected Return

The anticipated amount of profit or loss an investment is likely to generate over a specific period.

Risk-Free Asset

A risk-free asset refers to an investment that theoretically provides a certain return with no risk of financial loss.