In an Efficient Market and for an Investor That Believes

question 14

Multiple Choice

In an efficient market and for an investor that believes in a passive approach to investing,what is the primary duty of a portfolio manager?

• A) Accounting for results
• B) Diversification
• C) Identifying undervalued stocks
• D) No need for a portfolio manager

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Definitions:

Tax

A mandatory financial charge or a type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Producer Surplus

The difference between what producers are willing to sell a good for and the actual price they receive, representing a measure of producer welfare.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, reflecting the economic benefit to consumers.

Tax

An obligatory financial obligation or other form of levy placed on a taxpayer by a government agency to fund government operations and diverse public spending.