Which of the Following Is True of Budgets

question 64

Multiple Choice

Which of the following is true of budgets?

• A)Every budget must contain both revenues and expenses.
• B)Budgets reduce the comparability concept of accounting.
• C)The data in budgets are presented in dollars only;nonfinancial data should be excluded.
• D)Budgets are synonymous with managing an organization.

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Definitions:

CAPM

The Capital Asset Pricing Model, a model that describes the relationship between systematic risk and expected return for assets, particularly stocks.

Betas

A measure of the volatility, or systematic risk, of a security or portfolio compared to the market as a whole.

Future Volatility

The degree of variation of trading prices over time, typically measured by the standard deviation of returns, predicting the range of potential movements of an asset's price.

Rates of Return

The gains or losses of an investment over a specified period, expressed as a percentage of the investment's initial cost.