In the Alfred Hitchcock Presents Episode "Mail Order Prophet," a Man

question 166

Multiple Choice

In the Alfred Hitchcock Presents episode "Mail Order Prophet," a man receives mysterious letters that accurately predict the movements of certain stocks. After being correct several times in a row, the man, upon the letter's request, sends money to the market prophet in exchange for his latest stock tip. At the end of the episode we learn the "prophet" is actually a con man who sends a letter to many people with half the letters predicting a stock will increase and the other half predicting it will decrease. How does this Hitchcock episode illustrate one particular theory of Warren Buffet's wealth?

• A) It was very difficult to send out all those letters; hard work pays off.
• B) Like the letters in the story, Buffet happened to be right several times in a row.
• C) Buffet conned his way to the top, using insider information to become wealthy.
• D) Diversification is an important way to protect investments and build wealth.

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Definitions:

Period Costs

Costs that are not directly tied to the production of goods and are expensed in the accounting period they are incurred, such as sales and administrative expenses.

Prime Cost

The combined costs of raw materials and direct labor involved in the production of a product.

Manufacturing Overhead

Refers to all the indirect costs associated with the production process, such as utilities, maintenance, and salaries of supervisors that are not directly tied to the creation of a product.

Administrative Costs

Expenses related to the general operation of a business, including salaries of executive staff, office supplies, and utilities.