A Cost Accountant Is Developing a Regression Model to Predict

question 68

Multiple Choice

A cost accountant is developing a regression model to predict the total cost of producing a batch of car seats as a linear function of batch size (the number of seats produced in one lot or batch) .The slope of the accountant's model is ___.

• A)batch size
• B)unit variable cost
• C)fixed cost
• D)total cost
• E)total variable cost

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Definitions:

Liquidity Risk

The risk that an asset cannot be sold or converted into cash quickly enough to meet short-term financial obligations without a significant loss in value.

Bond

A fixed income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental) which pays periodic interest payments and the return of the principal at maturity.

Risk Premiums

The extra return or premium demanded by investors for holding riskier assets, above the risk-free rate.

Nominal Risk-Free Rate

The rate of return on an investment with no risk of financial loss, not adjusted for inflation.