If Fixed Costs Rise While Other Variables Stay Constant

question 79

Multiple Choice

If fixed costs rise while other variables stay constant

• A)the break-even point rises.
• B)the degree of operating leverage increases.
• C)total profit declines.
• D)All of the options

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Definitions:

Factor Portfolio

A portfolio that is constructed to have a high sensitivity to certain economic or financial factors, aiming to capture specific risk premiums.

Well-diversified Portfolio

An investment portfolio comprised of various assets to reduce exposure to risk by spreading investments across different industries, asset classes, or other categories.

Beta

A measure of the volatility, or systematic risk, of a security or portfolio compared to the market as a whole.

Factor Portfolio

A portfolio constructed to have a high sensitivity to certain risk factors, aiming to achieve specific investment outcomes related to those factors.