Which of These Is Not an Allocation Method Commonly Used

question 40

Multiple Choice

Which of these is not an allocation method commonly used to allocate support department costs to operating departments?

• A) indirect method
• B) direct method
• C) step-down method
• D) none of the above, i.e. all are allocation methods commonly used to allocate support department costs to operating departments

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Definitions:

NAV

Net Asset Value, the total value of a fund's assets minus its liabilities, usually expressed per share.

Tail Event

An event or outcome that has a small probability of happening but can lead to significant impacts, often referred to in the context of financial risks.

Statistical Arbitrage

A quantitative trading strategy that seeks to exploit price discrepancies between related financial instruments by using complex statistical models and algorithms.

Long Term Capital Management

A hedge fund management firm famous for its collapse in 1998, highlighting the risks of using extensive leverage and derivatives.