Important Reasons for Constructing a Policy Statement Include

question 40

Multiple Choice

Important reasons for constructing a policy statement include:

• A) Helps investors decide on realistic investment goals
• B) Create a standard by which to judge the performance of the portfolio manager
• C) Develop an instrument to judge risk
• D) Choices a and b
• E) All of the above

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Definitions:

Voting Shares

Shares that give the shareholder the right to vote on company matters.

GAAP

Generally Accepted Accounting Principles, a framework of accounting standards, principles, and procedures.

Significant Influence

The power to participate in the financial and operating policy decisions of an investee but not control those policies.

Ownership Percentage

This refers to the fraction or percentage of a company or asset that is owned by a particular shareholder or investor.