What Is the Best Use of a Static Budget

question 45

Multiple Choice

What is the best use of a static budget?

• A) to determine managerial efficiency
• B) to assess how well costs were controlled during the year
• C) to measure whether a manager accomplishes his or her goals
• D) to compare expected costs at the actual level of activity with the actual costs

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Definitions:

Morningstar's RAR

Refers to Morningstar's Risk-Adjusted Return, a calculation used to evaluate the performance of an investment by adjusting for its risk.

Performance Measures

Criteria or metrics used to assess, compare, and track the efficiency, effectiveness, or success of an investment or business operation.

Sharpe Measure

The Sharpe Measure assesses the risk-adjusted return of an investment, comparing its excess return over the risk-free rate to its standard deviation of returns.

Standard Deviation

A measure of the dispersion or variability of a set of values, used in finance to gauge the risk associated with an investment's return.