The Theory Behind the Variable Ratio Plan Is to

question 36

Multiple Choice

The theory behind the variable ratio plan is to

• A) passively buy and hold a wide variety of securities.
• B) time the cyclical movements of the stock market and thereby "buy low and sell high."
• C) avoid selling any security for a capital gain, and thus indefinitely avoiding the capital gains tax.
• D) keep the unit cost of the portfolio at a constant level.

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Definitions:

Business Combination

A transaction or event in which an acquirer obtains control of one or more businesses.

Acquisition

Acquiring management of a different company through the acquisition of its stocks or possessions.

Accounting

The systematic process of recording, analyzing, summarizing, and reporting the financial transactions of a business or individual.

Direct Costs

Expenses that can be directly attributed to the production of specific goods or services, such as materials and labor.