Which of the Following Statements Is Correct

question 7

Multiple Choice

Which of the following statements is correct?

• A) The dollar return is a more useful measure to compare performance because it more accurately reflects the change in wealth of the investor.
• B) A dominant portfolio is one that has the highest risk and highest return within a set of portfolios.
• C) By adding stocks to your portfolio, it is possible to effectively eliminate nearly all of the market risk.
• D) None of the statements are correct.

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Definitions:

Accounts Receivable

Money owed to a business by its clients or customers for goods or services delivered but not yet paid for, recorded as an asset on the balance sheet.

Allowance for Doubtful Accounts

A contra-asset account used to estimate the amount of receivables that may not be collectible.

Sole Proprietorship

A business owned and operated by a single individual, with no legal distinction between the owner and the business entity.

Division of Partnership Income

The method or agreement by which profits are distributed among partners in a partnership.