Which of the Following Will Reduce the Risk Accompanying Equity

question 353

Multiple Choice

Which of the following will reduce the risk accompanying equity (stock) investments?

• A) the purchase of shares of a mutual fund that holds the stocks of many diverse corporations
• B) the purchasing and holding of equities over a lengthy period of time
• C) the purchase of shares in firms doing business in a wider variety of industries and markets
• D) all of the above

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Definitions:

Standard Cost System

A cost accounting system where predetermined costs are used for valuing inventory and measuring performance.

Direct Labor Costs

The total of all wages, benefits, and taxes paid to employees who are directly involved in the manufacturing of products.

Work in Process

Goods that are in various stages of the production process but are not yet completed.

Standard Cost Card

A document listing the standard costs associated with manufacturing a product, including labor, materials, and overhead.