Which of the Following Statements About Management by Exception Is

question 164

Multiple Choice

Which of the following statements about management by exception is incorrect?

• A) Managers concentrate on results that are outside the accepted parameters.
• B) There is no need to investigate variances that are less than 20% of the budgeted amount.
• C) Exceptions can be expressed as a percentage of a budgeted amount or a dollar amount.
• D) Many companies use a combination of percentages and dollar amounts.

---

Definitions:

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, used to quantify the risk of an investment.

Expected Return

The weighted average of all possible returns from an investment, considering the probabilities of each outcome.

Efficient Market Hypothesis

The theory that asset prices fully reflect all available information, making it impossible to consistently achieve higher returns than the overall market.

Stock Market

A public marketplace for buying, selling, and issuing shares of publicly held companies; facilitates economic transactions and information exchange regarding stock prices and company performance.