Two Rationales for the Practice of Splitting a Client's Assets

question 36

Multiple Choice

Two rationales for the practice of splitting a client's assets between several investment managers are

• A) diversification of style and diversification of judgment
• B) diversification of risk and diversification of style
• C) diversification of systematic risk and diversification of non-systematic risk
• D) diversification of interest-rate risk and diversification of reinvestment risk.

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Definitions:

Total Revenue

The total amount of money received by a company from sales of goods or services, before any costs or expenses are subtracted.

Constant Slope

Refers to a straight line on a graph that illustrates a steady and unchanging rate of change between two variables.

Price Elasticity

Price elasticity measures how much the quantity demanded of a good responds to a change in its price, indicating how changes in price influence consumer purchasing behavior.

Demand Curve

A graph showing the relationship between the price of a good or service and the quantity demanded by consumers.