The Narrower the Probability Distribution of Expected Future Returns, the Smaller

question 181

Multiple Choice

The narrower the probability distribution of expected future returns, the smaller the ____ of a given investment.

• A)risk
• B)variance
• C)standard deviation
• D)Both a & b
• E)All of the above

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Definitions:

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, allowing for more accurate budgeting in variable operational conditions.

Materials Price Variance

The difference between the actual unit price paid for an item and the standard price, multiplied by the quantity purchased.

Standard Cost

A predetermined cost of manufacturing a single unit or a number of product units during a specific period under current or anticipated conditions.

Time Of Purchase

The specific point in time when goods or services are bought, which can influence the cost and availability.