What Critical Assumption Underpins Labour Market Compensation Surveys That May

question 45

Multiple Choice

What critical assumption underpins labour market compensation surveys that may serve to illustrate the need for pay equity legislation?

• A) Usage of compensation surveys assumes that the market values jobs in a fair manner.
• B) The market demand and supply of labour tends to operate at an equilibrium in the short term.
• C) Calibration of the pay system will insure a near-perfect labour price.
• D) Targeting a compa-ratio of 1 eliminates the need for pay equity legislation.

Assess the portfolio manager's forecasting ability using the Sharpe measure and tracking error.

Distinguish between passive and active portfolio management strategies.

Recognize the importance of adjusting alpha forecasts for forecast imprecision in portfolio construction.

Understand the application and impact of regression analysis and other tools in forecast adjustment.

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Definitions:

Variable Overhead

Costs that fluctuate with the level of production or business activity, such as utilities or raw materials.

Rate Variance

The difference between the expected standard cost and the actual cost incurred, calculated for direct labor rate, overhead rate, or material price.

Standard Direct Labor-Hours

The estimated hours required to produce a units based on standard efficiency and productivity levels.

Labor Efficiency Variance

The difference between the actual hours worked to produce a good or service and the standard hours expected, multiplied by the standard labor rate.