Which of the Following Statements Is False

question 38

Multiple Choice

Which of the following statements is false?

• A) A value-weighted portfolio is an equal-ownership portfolio: we hold an equal fraction of the total number of shares outstanding of each security in the portfolio.
• B) When buying a value-weighted portfolio, we end up purchasing the same percentage of shares of each firm.
• C) To maintain a value-weighted portfolio, we do not need to trade securities and rebalance the portfolio unless the number of shares outstanding of some security changes.
• D) In a value-weighted portfolio the fraction of money invested in any security corresponds to its share of the total number of shares outstanding of all securities in the portfolio.

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Definitions:

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected variable overhead based on standard cost accounting.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected variable overhead based on the predetermined rate.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a specific product and included in the direct costs of production.

Variable Overhead

Costs that vary with the level of production or business activity, such as utilities or indirect materials.