The Expected Return on a Riskless Asset Is Greater Than

question 53

Multiple Choice

The expected return on a riskless asset is greater than zero due to

• A) an expected return for delaying consumption.
• B) an expected return for opportunity costs.
• C) an expected return for taxes.
• D) irrational investors who believe risk is always present.

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Definitions:

Material

Substances or components that are used in the production or manufacturing of goods.

Underapplied Overhead

Happens when the overhead costs assigned to manufacturing are lower than the overhead expenses that were actually incurred.

Actual Overhead

Actual overhead refers to the direct costs actually incurred by a business for operations, including utilities, rent, and maintenance expenses.

Overhead Applied

The portion of overhead costs allocated to individual products or services based on an estimated or predetermined rate.