Which of the Following Statements Is True Regarding the Determination

question 56

Multiple Choice

Which of the following statements is true regarding the determination of operating segments under SFAS 131?

• A)An operating segment is a component of an enterprise that engages in business activities from which it only earns revenues.
• B)The operating results of an operating segment are reviewed regularly by the corporate controller to assess performance.
• C)There is integral financial information available for each operating segment
• D)An organizational unit can be an operating segment if all of its revenues or expenses result from transactions with other segments.
• E)All parts of a company must be included in some operating segment.

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Definitions:

Asset Allocation

The strategy of distributing investments among various types of assets (e.g., stocks, bonds, real estate) to optimize risk and reward based on an individual's or entity's goals and risk tolerance.

Excess Return

The return on an investment that exceeds a benchmark or risk-free return.

Bogey Portfolio

An investment portfolio used as a benchmark to measure the performance of other portfolios.

Treynor Measure

A performance metric for determining how well an investment compensates the investor for risk taken, excluding unsystematic risk.