You Have the Following Rates of Return for a Risky

question 73

Multiple Choice

You have the following rates of return for a risky portfolio for several recent years. Assume that the stock pays no dividends
-What is the geometric average return for the period?

• A) 2.87%
• B) 0.74%
• C) 2.60%
• D) 2.21%

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Definitions:

Flexible Budget

A dynamic budget that changes according to the business activity levels, offering a more adaptable financial planning tool.

Level of Activity

A measure of the volume of production or operations, often influencing cost behavior and used to allocate fixed costs to units of product.

Revenue Variance

The difference between the actual revenue earned and the budgeted or expected revenue.

Static Planning Budget

A budget based on a single level of output, not adjusted for changes in activity levels.