AmazonCom Stock Prices Gave a Realized Return of 15%, 15

question 3

Multiple Choice

Amazon.com stock prices gave a realized return of 15%, 15%, -15%, and -15% over four successive quarters. What is the annual realized return for Amazon.com for the year?

• A) -4.45%
• B) -7.12%
• C) -5.12%
• D) 0%

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Definitions:

Variable Costing

An accounting method that only allocates variable costs to inventory, treating fixed costs as period expenses that are charged to the income statement in the period they are incurred.

Absorption Costing

A method of inventory costing that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overheads - in the cost of a unit of product.

Contribution Format

A financial statement layout that separates fixed costs from variable costs to highlight the contribution margin of a business.

Absorption Costing

A financial tracking method that brings together all costs of production—direct materials, direct labor, and all overhead, both variable and fixed—inclusion in the price of a product.