Which Scenario Shows a Relatively Noisy Signal of a Future

question 78

Multiple Choice

Which scenario shows a relatively noisy signal of a future outcome?

• A) Jill's current GPA is 3.94, and she is expected to graduate in two months. Although her current classes are not yet completed, her advisor has to make a forecast about her grades for this semester. Her advisor forecasts that she will get As in all her current courses and will graduate with honors.
• B) Alex's current credit rating is low. She has a history of late payments, and debts that have gone to collection agencies. She is denied new credit because the credit card company forecasts that she will become delinquent on the payments.
• C) In February of 2009 Bill produces and releases a movie about the current President of the United States that projects what two terms of his leadership and polices might look like in terms of foreign relations, and the economic path the United States will follow out of the recession.
• D) John is a speculator, and he decides to buy up corn futures because the government has mandated that all new vehicles must use corn-based fuels within one year.

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Definitions:

Variable Cost Method

An accounting approach where costs that vary directly with the level of production are allocated to products, influencing the cost of goods sold and inventory valuation.

Contribution Margin

The difference between the sales revenue of a product and its variable costs, indicating the amount contributing towards covering fixed costs and generating profit.

Standby Passenger

Standby Passenger refers to a traveler who does not have a confirmed reservation for a flight and waits for an available seat to become free due to cancellations or no-shows.

Contribution Margin

Contribution margin is a financial metric that represents the amount of revenue from sales that exceeds variable costs, indicating the portion of sales revenue that contributes to covering fixed costs and generating profit.