Which of the Following Is Necessary for Any Valid Performance

question 90

Multiple Choice

Which of the following is necessary for any valid performance measurement?

• A)It must be part of the financial accounting system in use.
• B)It must be quantifiable.
• C)Goal congruence must be promoted by its use.
• D)It must be financial in nature.

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Definitions:

Firm-specific Variances

Variability in a company's stock price or financial performance that is attributable to internal factors unique to the company, rather than broader market influences.

Macroeconomic Factor

A Macroeconomic Factor is a condition or variable that impacts the economy at a broad scale, including inflation, unemployment, and economic growth rates.

Single-Index Structure

A model used in finance to describe the returns of a portfolio using a linear relationship between the return of the portfolio and the return of a market index.

Expected Returns

The anticipated average return on an investment, taking into account the probability of different outcomes, including both gains and losses.