The Stars in a BCG Matrix Typically

question 238

Multiple Choice

The Stars in a BCG Matrix typically

• A) produce large profits through substantial penetration of expanding markets.
• B) produce low profits and limited cash flow, but with little upside potential.
• C) may not generate much profit at the moment, but have upside potential to do so.
• D) produce little if any profit, and have low potential for future improvement.
• E) generate high profit for a short span of time and then become inactive.

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Definitions:

Arithmetic Return

The simple average of periodic returns of an investment over a specified time frame.

Dollar-Weighted Return

A method of calculating an investment's return that accounts for the timing and magnitude of cash flows into and out of the investment.

Dollar-Weighted Return

A method of calculating an investment's return that considers the timing and amount of capital inflows and outflows.

Dividend

A portion of a company's earnings distributed to its shareholders, usually in the form of cash or additional stock.