If an Individual Owns Only One Security the Most Appropriate

question 106

Multiple Choice

If an individual owns only one security the most appropriate measure of risk is

• A) standard deviation.
• B) correlation.
• C) beta.
• D) covariance.
• E) the risk-free rate.

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Definitions:

Master Budget

A comprehensive financial planning document that includes all of a company’s budgets, projecting its financial activities over a specific period.

Raw Materials

The basic materials from which products are made, prior to being processed or manufactured into final goods.

Finished Goods Inventory

The stock of completed products ready for sale, held at the end of an accounting period.

Direct Labor

The wages and benefits of employees who are directly involved in manufacturing a product or delivering a service.