Which of the Following Responsibility Centers May Be Evaluated on the Basis

question 179

Multiple Choice

Which of the following responsibility centers may be evaluated on the basis of residual income?

• A)investment center
• B)revenue center
• C)profit center
• D)cost center

Understand the impact of transaction costs on earning excess returns from inside trades.

Grasp the significance of public availability of insider trading information and regulatory disclosure requirements.

Recognize the limitations of earning excess returns through public inside trades.

Analyze how evidence indicates the efficiency level of U.S. stock markets.

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Definitions:

Triggering Event

An occurrence that sets in motion a series of actions, often used in business or law to indicate an event that triggers a contractual obligation or procedure.

Business Manager

An individual responsible for overseeing and directing the operations and activities within a business, ensuring efficiency and goal achievement.

Income Uncertainty

The unpredictability of future income streams, often associated with variable earnings, job instability, or economic fluctuations.

Business Ownership

The state or fact of owning a business, which entails bearing the risk of the venture and enjoying the profits derived from it.