The Goal of Active Equity Management Is to Earn a Return

question 27

True/False

The goal of active equity management is to earn a return that exceeds the return of a passive benchmark portfolio, net of transaction costs, on a risk-adjusted basis.

---

Definitions:

American Law

The legal system of the United States, including its statutes, regulations, case law, and constitutional provisions.

Insider Trading

The unlawful activity where individuals trade on the stock market for personal gain using private, sensitive information.

Business Judgment Rule

A legal principle that protects the decisions of a corporate board of directors from judicial review as long as those decisions are made within their authority and with a reasonable belief that they were in the best interests of the company.

Currency Trader

An individual or entity that buys and sells currency pairs on the foreign exchange market to profit from exchange rate fluctuations.