A Budget Is Most Likely to Be Effective If

question 68

Multiple Choice

A budget is most likely to be effective if

• A) it is used to assess blame when things do not occur according to plans.
• B) it is not used to evaluate a manager's performance.
• C) employees and managers at the lower levels do not get involved in the budgeting process.
• D) it has top management support.

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Definitions:

SML Shifts

Changes in the Security Market Line, a graphical representation of the Capital Asset Pricing Model (CAPM) that shows different levels of systematic, or market, risk versus return for the whole market.

Risk-Free Rate

The theoretical rate of return of an investment with zero risk, typically associated with government bonds.

Traditional Investment

Investment in conventional asset classes like stocks, bonds, and real estate, historically relied upon for generating returns.

Possible Outcomes

Various scenarios or results that may occur as a consequence of a decision or action in a given situation.