A Portfolio Will Usually Contain

question 30

Multiple Choice

A portfolio will usually contain:

• A)one riskless asset.
• B)one risky asset.
• C)two or more assets.
• D)no assets.
• E)None of the above.

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Definitions:

Annual Net Cash Flows

The total amount of money that flows into and out of a business over a year, after all revenues are collected and expenses are paid.

Marginal Tax Rate

The rate at which an additional dollar of income is taxed, indicating the tax impact on your next dollar earned.

Depreciation

The accounting method of allocating the cost of a tangible or physical asset over its useful life.

Net Investment

The difference between total investments and the depreciation on those investments over a period, representing the increase in value of an asset.