Question

When a firm suggests it can increase your returns by 20%-30% regardless of market performance, they are likely referring to

• A. the stability of their research team

• B. their asset mix and diversification

• C. their lower MER

• D. their higher liquidity

Answer 1

Here the correct answer is option C. 'their lower MER' because when a firm said they can increase returns regardless of market performance it only possible by lowering MER as MER has no relation with market performance.

Here the option A. 'the stability of their research team' is not correct answer because though stability of research team increases the return but it will also depends on market performance but market performance cannot be considered according to the question.

Here option B. is also not correct answer because the asset mix and diversification can only lower the risk but cannot increase the return.

Here option D is not correct answer because the higher liquidity means the firm can easily meet its short term debt. so it's cannot increase the return.