Which of the Following Statements Is True When Making a Decision

question 57

Multiple Choice

Which of the following statements is true when making a decision between two alternatives?

• A)Variable costs may not be relevant when the decision alternatives have the same activity levels.
• B)Variable costs are not relevant when the decision alternatives have different activity levels.
• C)Sunk costs are always relevant.
• D)Fixed costs are never relevant.

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Definitions:

Economy Sectors

Divisions within an economy, categorized by their primary business activities, such as technology, healthcare, and finance.

Portfolio Composition

The mix of different types of investments held in an investor's portfolio, determined based on their risk tolerance, investment goals, and time horizon.

Alpha-Seeking

Refers to investment strategies aimed at achieving returns that exceed the benchmarks or indices against which they are compared, often through active management.

Relative Mispricing

A situation where the price of an asset does not accurately reflect its value, usually in comparison to similar assets.