Sales Returns

question 157

Multiple Choice

Sales returns:

• A) Refer to merchandise that customers return to the seller after the sale.
• B) Refer to reductions in the selling price of merchandise sold to customers.
• C) Represent cash discounts.
• D) Represent trade discounts.
• E) Are not recorded under the perpetual inventory system until the end of each accounting period.

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Definitions:

Optimal Risky Portfolio

The optimal risky portfolio is the combination of risky assets that provides the highest expected return for a given level of risk or the lowest risk for a given level of expected return.

Risk Free Rate

The theoretical rate of return of an investment with zero risk, often represented by the yield on government securities like U.S. Treasury bonds.

Standard Deviation

A statistical measure that quantifies the variation or dispersion of a set of data points.

Optimal Risky Portfolio

A portfolio that offers the highest expected return for a given level of risk or the lowest risk for a given level of expected return, according to modern portfolio theory.