Portfolio Management

question 123

Multiple Choice

Portfolio management:

• A) does not consider quantitative screening criteria such as ROI.
• B) makes sense only if a manager is interested in comparing very similar alternatives.
• C) primarily focuses on the likely long-term potential of a product-market opportunity.
• D) is too complex to be helpful except in small companies that have only one product.
• E) None of the above is true.

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Definitions:

Short-Run Aggregate Supply Curve

It depicts the relationship between the price level and the quantity of goods and services that firms are willing and able to produce in the short run, while some production costs are fixed.

Long-Run Aggregate Supply Curve

A graphical representation showing the relationship between the overall price level and the total output produced by an economy when all factors of production are variable.

Sticky Price Theory

An economic theory suggesting that prices of goods do not adjust immediately to changes in supply and demand, leading to disequilibrium in the market.

Sticky Wage Theory

The hypothesis that wages do not adjust quickly to changes in economic conditions, leading to unemployment and other inefficiencies.