Which of the Following Is NOT a Step in the Portfolio

question 39

Multiple Choice

Which of the following is NOT a step in the portfolio management process?

• A) develop a policy statement
• B) study current financial and economic conditions
• C) construct the portfolio
• D) monitor investor's needs and market conditions
• E) sell all assets and reinvestment proceeds at least once a year

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Definitions:

Income Before Taxes

The amount of revenue left after deducting all operating expenses, interest, and depreciation, but before paying income taxes.

Straight-Line Method

A depreciation technique where an equal amount of depreciation is charged for each year of the asset's useful life.

Semiannual Interest

Interest that is calculated and paid twice a year, often used in the context of bonds and loans.

Effective Interest Method

An accounting practice used for calculating the amortized cost of a bond and the interest expense over the bond's life based on the effective interest rate.