Asked by Natasha De Freitas on Apr 26, 2024
Verified
An investor refuses to invest in any firm that produces alcohol or tobacco. This is an example of a ________ constraint.
A) return requirement
B) risk-tolerance
C) liquidity
D) social
Social Constraint
Limitations or restrictions on behavior that are enforced by social or cultural norms.
- Recognize the ethical and legal boundaries guiding investment activities and their impact on portfolio administration.
Verified Answer
JJ
Jazmynn JamesApr 28, 2024
Final Answer :
D
Explanation :
This is a social constraint. The investor is choosing to avoid investing in companies that go against their personal values and beliefs. This goes beyond traditional financial factors and speaks to the investor's moral or ethical stance on certain industries.
Learning Objectives
- Recognize the ethical and legal boundaries guiding investment activities and their impact on portfolio administration.