Suppose That an Investment Gave a Realised Return of 20

question 38

Multiple Choice

Suppose that an investment gave a realised return of 20% over a two-year time period and a 10% return over the third year. The geometric average annual return is

• A) 11.20%.
• B) 16.55%.
• C) 9.70%.
• D) 14.96%.

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Definitions:

Unfavorable Variance

A situation where actual costs exceed budgeted or expected costs.

Efficiency Variance

The difference between the actual input used in production and the standard input that was expected to be used.

Spending Variance

The difference between the actual amount spent and the budgeted amount for a category or period, indicating over or underspending.

Quantity Variance

The difference between the actual quantity of materials or labor used in production and the expected (or standard) quantity.