The Larger the Variance, the More the Actual Returns Tend

question 188

True/False

The larger the variance, the more the actual returns tend to differ from the average return.

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Definitions:

Accounting Profit

The difference between total monetary revenue and total monetary costs, excluding the consideration of opportunity costs.

Explicit Costs

These are the direct, clear expenses related to business operations, such as salaries, utilities, and rent, that are easily quantifiable.

Accounting Profit

The difference between the total revenue and explicit costs of a firm, not accounting for implicit costs.

Economic Profit

The variance between a company's overall incomes and its combined explicit and implicit expenses.