A Cost That Cannot Be Changed by Any Present or Future

question 195

Multiple Choice

A cost that cannot be changed by any present or future decision is a(n)

• A) incremental cost.
• B) opportunity cost.
• C) sunk cost.
• D) variable cost.

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Definitions:

Coefficient of Correlation

A numerical metric evaluating the magnitude and orientation of a linear correlation between two variables, with values spanning from -1 to 1.

Capital Allocation Line

A graph showing risk-versus-return profiles of different portfolios, including the risk-free rate and a combination of risky assets, guiding optimal asset allocation.

Efficient Frontier

A concept in modern portfolio theory demonstrating the set of optimal portfolios offering the highest expected return for a given level of risk.

Portfolio Standard Deviation

A measure of the dispersion of the returns of a portfolio, indicating its risk.