Which of the Following Statements Is True

question 25

Multiple Choice

Which of the following statements is true?

• A) A well-diversified portfolio has negligible systematic risk.
• B) A well-diversified portfolio has negligible unsystematic risk.
• C) An individual security has negligible systematic risk.
• D) An individual security has negligible unsystematic risk.

---

Definitions:

Labor Rate Variance

The discrepancy between what labor actually costs and what was originally forecasted or considered standard.

Variable Manufacturing

Costs that change in direct proportion to changes in the volume of production output.

Labor Rate Variance

A measure used in managerial accounting to assess the difference between the actual wage rates paid to workers and the expected standard wage rates for a period.

Standard Direct Labor

The expected amount of labor time and cost necessary to produce one unit of product under normal conditions.