Under the Variable-Ratio Plan, Additional Speculative Investments Are Made When

question 26

Multiple Choice

Under the variable-ratio plan, additional speculative investments are made when the ratio

• A) of conservative investments to speculative investments increases by 10%.
• B) of the rate of return on the speculative investments exceeds the overall market return by 1% or more.
• C) of the realized rate of return falls below the desired rate of return by 1% or more.
• D) of the value of the speculative investments to the total portfolio value drops below a predetermined level.

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Definitions:

Sales

The activity or process of selling products or services in exchange for money; transactions between buyers and sellers.

Profit Margin

Net income divided by sales.