Which One of the Following Statements Is Correct Concerning the One

question 39

Multiple Choice

Which one of the following statements is correct concerning the one stage approach being theoretically superior vis-a-vis the two-stage approach to security selection?

• A) The two-stage approach allows managers too much freedom to violate the risk-return preferences of the client.
• B) The two-stage approach does not allow managers to specialize in one particular asset class.
• C) The one-stage approach is superior because it uses all available information relevant to the construction of an optimal portfolio.
• D) The one-stage approach is preferred by most investment managers because it is simpler and cheaper to implement.

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Definitions:

Corporate Executives

Individuals at the highest level of management of corporations who have the day-to-day responsibility of managing the company.

Capitalism Support

Advocacy or backing for an economic system where trade, industry, and the means of production are largely or entirely privately owned and operated for profit.

Federal Elections

Elections held to choose representatives or leaders at the federal level of government, involving the selection of officials for national offices such as president, congress, or parliament.

Women

Adult human females, often discussed in contexts related to gender-specific issues, rights, and roles in society.