Which of the Following Is Not an Exit Barrier for Firms

question 1

Multiple Choice

Which of the following is not an exit barrier for firms in an industry?

• A)Sunk costs
• B)Labor agreements or commitments to purchase raw materials
• C)Obligations to input suppliers
• D)Excess capacity
• E)Government restrictions

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Definitions:

Excess Returns

Excess returns refer to the returns achieved above a benchmark or a risk-free rate of return.

Market Index

A statistical measure that reflects the overall movement of the market or a specific sector of the market.

Global Minimum Variance Portfolio

An investment portfolio that aims to achieve the lowest possible level of risk (variance) for a given rate of expected return, comprising assets from around the world.

Standard Deviation

A statistical measure of the dispersion or variability of a set of data points, often used in finance to gauge the volatility of an investment's return.