An Investment with a Large Spread Between Possible Payoffs Will

question 57

Multiple Choice

An investment with a large spread between possible payoffs will generally have:

• A) a low expected return.
• B) a high standard deviation.
• C) a low value at risk.
• D) both a low expected return and a low value at risk.

---

Definitions:

Operations

The day-to-day activities involved in running a business, especially those related to production, manufacturing, or providing services.

Standard Cost System

An accounting system that uses predetermined costs for products or services to help managers control expenses and analyze operational performance.

Direct Labor

The labor costs that can be directly attributed to the production of goods or services, such as wages for workers who assemble a product.

Standard Cost System

An accounting system that uses predetermined costs for product costing and variance analysis.