If a Constant-Dollar Plan Portfolio Is Profitable Over the Long

question 53

Multiple Choice

If a constant-dollar plan portfolio is profitable over the long run, the in value over time.

• A) conservative portion will increase
• B) conservative portion will remain constant
• C) aggressive portion will decrease
• D) entire portfolio will remain constant

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Definitions:

Economies of Scale

The economic gains achieved by businesses because of their large scale, volume of production, or extent of operations, which usually results in a reduction in the cost per unit as the scale of operation grows.

Cost-output Elasticity

Cost-output elasticity measures the responsiveness of the cost of producing a good to a change in the output level, indicating how costs change as production scales.

Marginal Cost

The increase in expenditure resulting from the production of an additional unit of a good or service.

Short-run Cost Function

The relationship between the cost of production and the level of output when at least one input is fixed in the short term.