Which of the Following Statements Is NOT True

question 4

Multiple Choice

Which of the following statements is NOT true?

• A) International diversification benefits induce investors to demand foreign securities.
• B) An international security adds value to a portfolio if it reduces risk without reducing return.
• C) Investors will demand a security that adds value.
• D) All of the above are true.

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Definitions:

Variable Costing

Variable costing is an accounting method that only considers variable costs in the calculation of the cost of goods sold, excluding fixed costs.

Net Operating Income

Income derived from normal business operations after subtracting all operating expenses but before interest and taxes.

Absorption Costing

An accounting procedure that integrates all production-related costs, capturing direct material expenses, direct labor costs, and all overheads, variable and fixed, within the cost framework of a product.

Net Operating Income

The amount left from a company's sales revenue after subtracting the costs of running the business, excluding tax and interest expenses.