Treynor's Performance Measure Implicitly Assumes a Completely Diversified Portfolio

question 22

True/False

Treynor's performance measure implicitly assumes a completely diversified portfolio.

Recognize the importance of diversity and synergy in leadership and organizational success.

Appreciate the impact of cultural values on leadership effectiveness and follower's acceptance.

Understand how performance orientation affects organizational and societal encouragement and rewards for performance improvement.

Identify gender egalitarianism and its impact on society and organizations.

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Definitions:

Variable Cost

Costs that change in proportion to the level of production activity or volume, such as raw material costs and direct labor costs.

Fixed Cost

A cost that remains constant, in total, regardless of changes in the level of activity within the relevant range. If a fixed cost is expressed on a per unit basis, it varies inversely with the level of activity.

Margin of Safety Percentage

A metric that measures how much sales can drop before a business reaches its break-even point, typically expressed as a percentage.

Variable Expenses

Costs that vary directly with the level of production or business activity.