You Observe the Following Scatterplot of Ford's Weekly Returns Against

question 30

Multiple Choice

You observe the following scatterplot of Ford's weekly returns against the S&P 500.Which of the following statements is true about Ford's beta against the S&P 500?

• A)Ford's beta appears to be positive.
• B)Ford's beta appears to be negative.
• C)Ford's beta appears to be zero- there is no apparent relation between its return and the S&P return.
• D)Beta has nothing to do with the relationship seen in this scatterplot.

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Definitions:

Volume Variance

A measurement of the difference between the actual production volume and the expected (or budgeted) production volume, affecting the costs incurred.

Variable Component

A cost associated with the production of goods or services that varies with the level of output or sales.

Predetermined Overhead Rate

A rate calculated before the accounting period begins, used to apply manufacturing overhead costs to products by estimating fixed and variable manufacturing overhead costs for the coming period.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead to individual units of production, based on estimated costs.