Margin Sensitive Businesses Have a Cost Structure That Is

question 90

Multiple Choice

Margin sensitive businesses have a cost structure that is:

• A) high fixed cost to total cost
• B) high fixed costs to variable costs
• C) high variable costs to total costs
• D) high variable costs to fixed costs

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Definitions:

Black Monday

Refers to a specific date, October 19, 1987, when stock markets around the world crashed, recording the largest one-day percentage decline in stock market history.

Daily Returns

The profit or loss of an investment over a single trading day, expressed as a percentage of the investment's value at the start of the trading day.

Normally Distributed

A statistical term that describes a bell-shaped frequency distribution that is symmetric about the mean, used in various financial models to assume the distribution of returns or asset prices.

Risk-Adjusted Returns

Performance measurement that evaluates the return gained from an investment relative to the risk taken, often calculated using measures such as the Sharpe ratio.