Which of the Following Statements Is FALSE

question 79

Multiple Choice

Which of the following statements is FALSE?

• A)Expected return should rise proportionately with volatility.
• B)The shares of the largest companies are typically more volatile than a portfolio of large cap shares.
• C)Investors would not choose to hold a portfolio that is more volatile unless they expected to earn a higher return.
• D)Smaller company shares have lower volatility than larger stocks.

---

Definitions:

Variable Production Costs

Costs that change in proportion to the level of production activity, such as raw materials and direct labor.

Variable Costing

A costing method that includes only variable production costs in the cost of goods sold and treats fixed overhead as a period expense.

Absorption Costing

A cost calculation method in accounting that adds all expenses related to manufacturing—direct materials, direct labor, and both fixed and variable overhead—into the final cost of a product.

Directly Traced

Refers to costs or expenses that can be directly linked to a specific product, service, or department.