Assume You Are Analyzing Stock Market Risk Premiums Over Time

question 43

Multiple Choice

Assume you are analyzing stock market risk premiums over time.Which one of these would be the computation to use to compute the standard error of those premiums?

• A)Variance^1/2
• B)Variance/(Number of observations - 1)
• C)Σ Deviations²
• D)Σ Deviations²/(Number of observations - 1)
• E)SD(R)/Number of observations^1/2

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Definitions:

Standard Direct Labor-Hours

The estimated amount of labor hours required to produce a unit of product, used in budgeting and variance analysis.

Denominator Level

The activity level used to compute a predetermined overhead rate, often reflecting capacity or expected usage.

Budget Variance

The difference between budgeted figures for a set period and the actual figures achieved.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard cost allocated for the actual level of activity.