The Portfolio Expected Return of Two Investments

question 148

Multiple Choice

The portfolio expected return of two investments

• A)will be higher when the covariance is zero.
• B)will be higher when the covariance is negative.
• C)will be higher when the covariance is positive.
• D)does not depend on the covariance.

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Definitions:

Machine-Hours

A measure of production volume or activity based on the number of hours machines are operated within a specified period.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products or job orders, calculated before the period begins based on estimates.

Direct Labor-Hours

The entire duration of work performed by staff members directly participating in the manufacturing chain.

Machine-Hours

A measure of the total time machinery is in operation during a specified period, often used in allocating manufacturing overhead costs.