Which of the Following Statements Is CORRECT

question 6

Multiple Choice

Which of the following statements is CORRECT?

• A) The typical R² for a stock is about 0.94 and the typical R² for a portfolio is about 0.6.
• B) The typical R² for a stock is about 0.3 and the typical R² for a large portfolio is about 0.94.
• C) The typical R² for a stock is about 0.94 and the typical R² for a portfolio is also about 0.94.
• D) The typical R² for a stock is about 0.6 and the typical R² for a portfolio is also about 0.6.
• E) The typical R² for a stock is about 0.3 and the typical R² for a portfolio is also about 0.3.

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Definitions:

Direct Method

A method of reporting the cash flows from operating activities as the difference between the operating cash receipts and the operating cash payments.

ABC

Activity-Based Costing, a method that allocates overhead and indirect costs to related products and services based on their usage.

Support Department Costs

Expenses related to departments that do not directly contribute to the production of goods or services but provide necessary support, such as IT and HR.

Support Activity Costs

Expenses related to functions that assist the core operations of a business, such as human resources or accounting, which do not directly contribute to the production of goods or services.