Fixed Costs

question 53

Multiple Choice

Fixed costs

• A)Increase with the level of production in the short run.
• B)Can be altered in the short run but not in the long run.
• C)Increase as we move from the short run to the long run.
• D)Are constant in the short run.

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Definitions:

Sharpe Ratio

A measure that indicates the average return earned in excess of the risk-free rate per unit of volatility or total risk, assessing the performance of an investment.

Risk Aversion

The preference to avoid uncertainty and potential financial loss.

Holding-period Return

The total return received from holding an asset or portfolio of assets over a period of time, considering both income and capital gains.

Risk Aversion

The behavior exhibited by investors who prefer lower risk investments, often at the expense of sacrificing some potential returns.