The Global Distribution of Wealth Is Referred to as a "Champagne

question 82

Multiple Choice

The global distribution of wealth is referred to as a "champagne glass distribution" because:

• A) in the global economy, the best workers, products, and innovations bubble to the top.
• B) only a few people are able to afford the expensive luxury items that are popular in the global economy.
• C) the top 5 percent of global adults own more than one-third of the world's wealth.
• D) the economy is fragile and could shatter at any time.

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Definitions:

Active Portfolio

An investment portfolio that is managed with the intent to outperform the market through selecting and trading securities.

At-The-Money Call

An option contract with an exercise price that is approximately equal to the current price of the underlying asset.

Out-Of-The-Money Call

Refers to a call option where the strike price is higher than the market price of the underlying asset.

Treynor-Black Model

A portfolio optimization model that blends active and passive investments to optimize risk-adjusted returns.