In General, the Geometric Mean Will Be ________ the Arithmetic

question 63

Multiple Choice

In general, the geometric mean will be ________ the arithmetic mean for a series of returns.

• A) less than
• B) greater than
• C) equal to
• D) greater than or equal to

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Definitions:

Flexible Budgets

Budgets that are designed to vary in accordance with changes in the level of activity or output, to provide more accurate costing and planning.

Spending Variance

The difference between the actual amount of the cost and how much the cost should have been, given the actual level of activity. A favorable (unfavorable) spending variance occurs because the cost is lower (higher) than expected, given the actual level of activity for the period.

Static Planning Budget

A projection of budget figures based on a fixed level of activity or volume, not adjusted for changes.

Flexible Budget

A budget that adjusts or varies with changes in the volume of activity, revenue, or other factors affecting budgetary needs.