Monitoring and Rebalancing a Portfolio Over Time Involves All of the Following

question 9

Multiple Choice

Monitoring and rebalancing a portfolio over time involves all of the following costs EXCEPT

• A)commissions.
• B)possible impact on market price.
• C)holding a portfolio that is no longer adequately diversified.
• D)time involved in decision making.

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Definitions:

Net Cash

The amount of cash and cash equivalents minus any liabilities or financial obligations.

Cash Basis

An accounting method where revenues and expenses are recognized only when cash is exchanged.

Financing Activities

Transactions involving raising capital or repaying funds to and from investors and creditors, as reflected in the cash flow statement.

Net Cash

The amount of cash that remains after deducting all operational, financial, and investment activities over a period.