A Responsibility Center Is a Part, Segment, or Subunit of an Organization

question 147

True/False

A responsibility center is a part, segment, or subunit of an organization, whose manager is accountable for a specified set of activities that impact revenues, costs, or profits and in the case of an investment center, profits.

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Definitions:

Potential Reward

The expected gain or benefit that may be obtained from an investment or action.

Risky Asset

An asset that carries a higher level of financial risk when compared to safer investments, often with the potential for higher returns.

Semi-Strong Efficiency

A form of market efficiency that asserts all public information is already reflected in stock prices, making it impossible to achieve consistently higher returns.

Historical Information

Past data or records that provide context or insight into an event, individual, or institution's background.