If a Discretionary Cost Can Be Treated Like an Engineered

question 20

Multiple Choice

If a discretionary cost can be treated like an engineered cost,cost control may be achieved through the use of

• A)program budgeting.
• B)zero-base budgeting.
• C)capital budgeting.
• D)flexible budgeting.

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Definitions:

HML Beta

A measure used in finance to assess the sensitivity of an asset or portfolio to a value factor, defined as high minus low book-to-market stocks.

SMB Beta

Stands for Small Minus Big Beta, a metric used in finance to measure a stock's sensitivity to the SMB factor, which represents the excess return of small-cap stocks over large-cap stocks.

Market Beta

A measure of a stock's volatility in relation to the overall market; indicates the stock's sensitivity to market movements.

Factor Portfolio

A portfolio constructed to have a high sensitivity to specific risk factors, aiming to capture the risk premiums associated with those factors.