The Critical Variable in the Determination of the Success of the Active

question 72

Multiple Choice

The critical variable in the determination of the success of the active portfolio is the stock's __________.

• A) alpha/nonsystematic risk
• B) alpha/systematic risk
• C) delta/nonsystematic risk
• D) delta/systematic risk

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Definitions:

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or a normal operating cycle, whichever is longer.

Current Liabilities

Short-term financial obligations that are due within one year and are listed on a company's balance sheet.

Common-size Percent

A financial analysis tool that expresses each item in a financial statement as a percentage of a base amount, facilitating comparison across different periods or companies.

Total Assets

The sum of all resources owned by a company, valued in monetary terms, which include buildings, equipment, inventory, and cash.