The M-Squared Measure

question 70

Multiple Choice

The M-squared measure

• A) considers only the return when evaluating mutual funds.
• B) considers the risk-adjusted return when evaluating mutual funds.
• C) considers only the total risk when evaluating mutual funds.
• D) considers only the market risk when evaluating mutual funds.
• E) none of these.

---

Definitions:

Variable Costing

A costing method that includes only variable production costs—direct materials, direct labor, and variable manufacturing overhead—in product costs.

Direct Materials

Materials that can be directly linked to the production of a product and are essential components of the final product.

Fixed Costs

Charges that do not fluctuate with production or sales volume, such as property leases, payroll, and insurance policies.

Income Statement

A financial statement that shows a company's revenues, expenses, and profits over a specific period.