The Opportunity Cost of Portfolio Insurance Is the Difference in the Value

question 4

True/False

The opportunity cost of portfolio insurance is the difference in the value of the insured portfolio and the value of the uninsured portfolio when the market goes up.

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Definitions:

Extrinsic Motivation

Motivation driven by external rewards such as money, fame, grades, or praise, which stands in contrast to intrinsic motivation, which is driven by the enjoyment or interest in the activity itself.

Equity Theory

A process theory that states that motivation stems from a comparison of the inputs one invests in a job and the outcomes one receives in comparison with the inputs and outcomes of another person or group.

Effort

The amount of energy, time, and resources that an individual invests in completing a task or achieving a goal.

Goals

Targets or desired outcomes that an individual, group, or organization aims to achieve.