As Product Diversity and Direct Costs Increase,it Is Usually Best

question 53

Multiple Choice

As product diversity and direct costs increase,it is usually best to switch away from a ________ cost system and move to a ________ cost system.

• A)low;high-based
• B)job;activity-based
• C)broad;job-based
• D)activity;broad-based
• E)broad;activity-based

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Definitions:

Opportunity Sets

The range of possible investment opportunities available to an investor, given their resources and risk tolerance.

Risk-free Rate of Return

The theoretical rate of return of an investment with zero risk, typically represented by government bonds.

Market Rate of Return

The expected or average annual rate of return on an investment, based on historical or specified market data.

Asset-specific Risk

The risk associated with an investment in a specific asset, which can result from factors unique to that asset, independent of the market.