Exhibit 7-5
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

question 63

Multiple Choice

Exhibit 7-5
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) $\begin{array}{ccc}\text { Portiolio } & \text { Expected Return } & \text { Standard Deviation } \\\hline \text { A } & 9.8 \% & 14.0 \% \\\text { B } & 6.7 \% & 9.8 \% \\\text { C } & 11.2\%& 18.5\%\end{array}$
-Refer to Exhibit 7-5. Which of the three portfolios are most likely to be the market portfolio?

• A) Portfolio A
• B) Portfolio B
• C) Portfolio C
• D) All of the portfolios are equally likely to be the market portfolio
• E) There is insufficient information to differentiate between the three portfolios

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Definitions:

Activity-Based Costing

An accounting method that assigns costs to products and services based on the activities and resources that go into producing them, providing more accurate product costing.

Manufacturing Overhead

Costs involved in the manufacturing process that cannot be directly linked to the production of a specific product, like maintenance and factory supervision.

Traditional Costing System

A costing methodology that assigns manufacturing overhead costs to products based on volume-related measures like labor hours or machine hours.

Direct Labor-Hours

The total hours worked by employees directly involved in the manufacturing process or providing service, used to allocate expenses in job costing.