Which of the Following Statements Accurately Represents What Clients Can

question 4

Multiple Choice

Which of the following statements accurately represents what clients can do to ensure that their portfolios reflect their own specific risk-return preferences?

• A) Clients need to develop monitoring procedures to evaluate their manager's investment activities relative to predefined goals and constraints
• B) Clients need not pay very close attention to their investment objectives if they have an effective relationship with their manager
• C) The client will have to subordinate their individual preferences to all the clients in the management firm for optimal results.
• D) Rather than give overly detailed investment objectives, the client should be prepared to allow their manager to interpret for them the optimal tradeoff between risk and return

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Definitions:

Economy

The organized system of human activity involved in the production, consumption, and distribution of goods and services in a particular geographic or political area.

Economic Contraction

A decline in national output as measured by GDP, often marked by a decrease in spending, investment, and general economic activity.

Aggregate Supply

The total supply of goods and services that firms in an economy are willing and able to sell at a given overall price level in a given time period.

Aggregate Demand

The total demand for all goods and services within a particular market or economy at a given overall price level and in a given period.