The Typical Proxy for the Market Portfolio Is the S&P/TSX

question 6

True/False

The typical proxy for the market portfolio is the S&P/TSX Composite Index because it is diversified and price weighted.

---

Definitions:

Contribution Margin

The contribution margin represents the portion of sales revenue that is not consumed by variable costs and is available to cover fixed costs, contributing to profit.

Fixed Cost

A fixed cost is a cost that does not change with an increase or decrease in the amount of goods or services produced or sold.

Hard Rationing

A situation where capital is not available to a company under any circumstances, often due to economic conditions or poor company performance.

Soft Rationing

A situation where a company limits the amount of funding or capital it allocates to new or ongoing projects, often due to internal policy decisions.