When a Few Individuals at the Top of an Organization

question 142

Multiple Choice

When a few individuals at the top of an organization retain decision-making authority, the organization is referred to as a(n) :

• A) investment center.
• B) decentralized organization.
• C) profit center.
• D) centralized organization.

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Definitions:

Optimal Risky Portfolio

A portfolio that offers the highest expected return for a given level of risk, according to modern portfolio theory.

Risk Free Rate

The theoretical rate of return on an investment with no risk of financial loss, often represented by government bond yields.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, widely used in finance to gauge the volatility of an investment.

Probability Distribution

A statistical function that describes all the possible values and likelihoods that a random variable can take within a given range.