Given a Specific Set of Data, the Basis of Accounting

question 19

Multiple Choice

Given a specific set of data, the basis of accounting selected by or imposed on a governmental entity will least affect which of the following?

• A)Determining whether or not the governmental entity has a balanced budget.
• B)Determining whether or not the governmental entity has the ability to issue debt.
• C)Determining whether or not certain economic events occurred.
• D)Determining the annual payments to a government-sponsored pension plan.

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Definitions:

Required Return

The minimum expected return by investors for undertaking an investment, considering its risk and the time value of money.

Index Fund

A type of mutual fund or exchange-traded fund designed to replicate the performance of a specific market index by holding the same investments as the index.

Market Risk Premium

The extra yield an investor anticipates by keeping a risky market portfolio over risk-free securities.

Beta

An indicator of how much the risk or instability of a security or portfolio deviates from the broader market.