Which of the Following Statements About the Relationship Between Rate

question 89

Multiple Choice

Which of the following statements about the relationship between rate of return and risk is true?

• A) A portfolio often provides a higher rate of return for a given level of risk than any individual asset can offer.
• B) Individual assets typically provide higher rates of return than portfolios, given that portfolios are lower risk.
• C) A portfolio often provides a higher rate of return than any other type of savings.
• D) A portfolio is the safer choice and thus provides a lower rate of return than any other type of savings.

---

Definitions:

Factory Utilities

Costs associated with the utilities consumed in the production process, such as electricity, gas, and water.

Overhead Allocation Base

A measure or criteria used to distribute indirect costs to various products, services, or departments based on their usage or consumption.

Direct Labor Hours

The total time workers spend producing a product or performing a specific service, directly contributing to the output.

Plantwide Overhead Rate

A single overhead absorption rate used throughout an entire factory or plant, applied uniformly to all cost objects irrespective of the department incurring the overhead.