Which of the Following Statements Is Most Correct

question 40

Multiple Choice

Which of the following statements is most correct?

• A)Combining positively correlated assets having the same expected return results in a portfolio with the same level of expected return and a lower level of risk.
• B)Combining negatively correlated assets having the same expected return results in a portfolio with the same level of expected return and a higher level of risk.
• C)Combining positively correlated assets having the same expected return results in a portfolio with a lower level of expected return and a lower level of risk.
• D)Combining negatively correlated assets having the same expected return results in a portfolio with a lower level of expected return and a lower level of risk.
• E)none of the above

Calculate the rate of return on savings and understand the effects of interest rates on savings and loans.

Reconcile bank statements and checkbook balances, and understand the concept of outstanding checks.

Understand the impact of tax rates on savings and investments and calculate the after-tax rate of return.

Identify key terms related to the cost of borrowing for corporations and the insurance of deposits by the FDIC.

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Definitions:

Operating Expenses

These are the costs associated with running the day-to-day operations of a business, excluding the cost of goods sold.

Work In Process

A category of inventory for items that are currently being manufactured but are not yet complete.

Finished Goods Inventory

Refers to the stock of completed products that are ready to be sold but have not yet been sold.

Merchandising Firm

A business entity that purchases goods in their completed form and sells them to customers without further processing or manufacturing.