You Are Really Upset with Your Brother, but You Know

question 86

Multiple Choice

You are really upset with your brother, but you know that you cannot tell him that you hate him because mom and dad will be angry. So you tell everyone that it is your brother who really hates you. According to Freud, this reflects the defence mechanism of

• A) reaction formation
• B) denial
• C) rationalization
• D) projection
• E) sublimation

Calculate and interpret the global minimum variance portfolio.

Understand the role of the Capital Asset Pricing Model (CAPM) and the capital allocation line (CAL).

Understand the concept of systematic and unsystematic risk and their implications for portfolio management.

Understand and calculate the covariance and correlation between securities.

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Definitions:

Variable Costing

An accounting method that only allocates variable costs to inventory, treating fixed costs as period costs that are expensed in the period they are incurred.

Operating Income

The profit realized from a business's operations after subtracting operating expenses from gross profit, indicating the efficiency of core business activities.

Absorption Costing

A costing method where all of the costs associated with manufacturing a product are absorbed by the units produced, including both variable and fixed manufacturing costs.

Operating Income

Earnings before interest and taxes (EBIT), representing the profit a company makes from its core operations.