Which of the Following Reasons Would NOT Explain Why It

question 2

Multiple Choice

Which of the following reasons would NOT explain why it is so difficult to specify the risk-return preferences of investment management clients?

• A) It is difficult to translate subjective and ill-defined feelings into quantitative terms.
• B) Most investors have only a vague understanding of their own risk-return preferences.
• C) Even under questioning, clients will give seemingly inconsistent answers to similar questions.
• D) Investors usually have more concern about the target for short-run returns than long-run returns.

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Definitions:

Budget Line

A graphical representation of all possible combinations of two goods that a consumer can purchase given their income and the prices of the goods.

Commodity 1

A term typically used to denote the first item or primary focus in a series of commodities being analyzed or discussed.

Budget Line

A visual depiction of all the different combinations of two products that can be bought given certain prices and a specific income level.

Punk Rock

A genre of music that emerged in the 1970s, characterized by fast, hard-edged music and attitudes of rebellion and anti-establishment.