Which of the Following Is the CORRECT Accounting Equation

question 93

Multiple Choice

Which of the following is the CORRECT accounting equation?

• A)Assets + Revenue = Liabilities + Expenses
• B)Assets = Liabilities + Owners' equity
• C)Assets + Revenue = Owners' equity
• D)Assets + Liabilities = Owners' equity

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Definitions:

Optimal Risky Portfolio

According to modern portfolio theory, this portfolio provides the maximum expected return for a specific risk level or minimizes the risk for a set expected return.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, commonly used in finance to quantify the risk associated with a given investment.

Perfectly Negatively Correlated

A situation in which two variables move in opposite directions with a correlation coefficient of -1, implying that when one variable increases, the other decreases.

Risk-Free Portfolio

An investment group that is considered to have no risk of financial loss, typically represented by government bonds.