The Slope of the Security Market Line Is Equal to The

question 60

Multiple Choice

The slope of the security market line is equal to the:

• A)market risk premium.
• B)risk-free rate of return.
• C)market rate of return.
• D)market rate of return multiplied by any security's beta, given an inefficient market.
• E)market rate of return multiplied by the risk-free rate.

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Definitions:

Predetermined Overhead Rate

An established rate used to apply manufacturing overhead costs to products, calculated in advance based on expected costs and activity levels.

Labor-Hour

A measure of work effort quantified in hours, commonly used to allocate costs or measure productivity in various contexts.

Fixed Overhead Volume Variance

A financial metric indicating the difference between the budgeted and actual volume of production, multiplied by the fixed overhead rate per unit.

Fixed Overhead Volume Variance

The difference between the budgeted and actual volume of production, which results in a variance in fixed overhead costs allocated per unit.