Historical Rates of Return for the Last 82 Years Place

question 202

Multiple Choice

Historical rates of return for the last 82 years place ________ at the highest end of the spectrum for risk and ________ at the lowest end for risk.

• A)common stocks;T-Bills
• B)common stocks;long-term government bonds
• C)common stocks;long-term corporate bonds
• D)long-term corporate bonds;long-term government bonds

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Definitions:

Break-even Point

The financial state where total costs equal total revenues, implying that the business is neither making a profit nor a loss.

Operating Income

The profit earned from a company's core business operations, excluding deductions of interest and tax.

Variable Costing

The concept that considers the cost of products manufactured to be composed only of those manufacturing costs that increase or decrease as the volume of production rises or falls (direct materials, direct labor, and variable factory overhead).

Absorption Costing

An accounting method that includes all of the manufacturing costs in the cost of a product, including direct materials, direct labor, and both variable and fixed manufacturing overhead.