Which Is the Best Measure of Risk for a Single

question 47

Multiple Choice

Which is the best measure of risk for a single asset held in isolation, and which is the best measure for an asset held in a diversified portfolio?

• A) Variance; correlation coefficient.
• B) Standard deviation; correlation coefficient.
• C) Beta; variance.
• D) Coefficient of variation; beta.

---

Definitions:

Activity-Based Costing System

A costing methodology that assigns manufacturing overhead costs to products based on the activities and resources that go into producing them.

Unit Product Costs

The cost assigned to each unit of product, which includes direct materials, direct labor, and allocated manufacturing overhead.

Facility-Level Costs

These are the costs that are necessary to operate a facility, such as a manufacturing plant or a warehouse, and do not vary significantly with production volume.

Overhead Cost

Expenses related to the ongoing operational costs of running a business that are not directly tied to the production of goods or services.