A Fixed Cost Is a Cost Which

question 37

Multiple Choice

A fixed cost is a cost which

• A) varies in total with changes in the level of activity.
• B) remains constant per unit with changes in the level of activity.
• C) varies inversely in total with changes in the level of activity.
• D) remains constant in total with changes in the level of activity.

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Definitions:

Nonsystematic Standard Deviation

A measure of variance in a portfolio's total returns attributable to factors specific to individual securities, as opposed to the market.

Equally-Weighted Portfolio

An equally-weighted portfolio is an investment strategy that gives the same weight, or importance, to each asset in the portfolio, regardless of the size or market value of the companies.

Securities

Securities that signify either an equity stake in a corporation that is publicly traded, a debt interest in a company or government entity, or ownership rights as delineated by an option.

HML Beta

A measure used in finance to assess the sensitivity of an asset or portfolio to a value factor, defined as high minus low book-to-market stocks.