Which of the Following Statements Is False

question 78

Multiple Choice

Which of the following statements is false?

• A) Adding more unrelated securities to a portfolio reduces unsystematic risk.
• B) Changes in Federal Reserve policy have more effect on systematic risk than unsystematic risk.
• C) Systematic risk will increase during a recession.
• D) Market risk may be reduced through diversification.
• E) Oil shocks affect market risk.

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Definitions:

Unit Product Cost

The total cost (direct materials, direct labor, and overhead) associated with producing a single unit of a product.

Traditional Costing Method

A costing methodology that allocates overhead costs based on a single, volume-based cost driver, such as labor hours or machine hours.

Direct Labor-Hours

The total time workers spend on producing a product, directly correlating to the product itself.

Unit Product Cost

An expression of the total production cost (materials, labor, and overhead) divided by the number of units produced.