Which of the Following Is True About the Budgeting Process

question 96

Multiple Choice

Which of the following is true about the budgeting process?

• A)Managers do not use budgets to compel strategic analysis.
• B)Managers do not use budgets to promote communication in the workplace.
• C)Managers do not use budgets to promote communication across subunits in the workplace.
• D)To be useful,managers must support the budget and be flexible if economic conditions change.
• E)To be useful,managers do not support the budget and be flexible if economic conditions change.

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Definitions:

Required Return

The minimum return that an investor expects to achieve on an investment, considering the risk associated with it.

Risk-free Rate

The theoretical return of an investment with zero risk, often represented by the yield on government securities.

Beta

Beta is a measure of a stock's volatility in relation to the overall market; a beta greater than 1 indicates higher volatility, while a beta less than 1 indicates lower volatility.

Gross Domestic Product

The total value of all goods and services produced within a country over a specific time period, reflecting the overall economic health.