The Variance of Returns for a Risky Asset Is 25

question 81

Multiple Choice

The variance of returns for a risky asset is 25%.The variance of the error term,Var(e) ,is 8%.What portion of the total risk of the asset,as measured by variance,is systematic?

• A) 32%
• B) 8%
• C) 68%
• D) 25%
• E) 75%

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Definitions:

Underapplied Overhead

A situation where the actual manufacturing overhead costs are higher than the overhead costs allocated to products.

Credit Side

The right side of an accounting ledger where increases in liabilities, revenues, and equity accounts are recorded.

Short Term Profitability

The ability of a company to generate profit over a brief period, often evaluated on a quarterly or annual basis.

Marketing Costs

Expenses related to promoting and selling products or services, including advertising, product promotion, and sales force expenses.