Which of the Following Is an Example of a Fixed

question 261

Multiple Choice

Which of the following is an example of a fixed cost?

• A) Wages
• B) Outgoing freight
• C) Depreciation
• D) Sales commissions
• E) Packaging material expense

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Definitions:

CAPM (Capital Asset Pricing Model)

A model that describes the relationship between systematic risk and expected return for assets, particularly stocks.

Risk-Free Rate

The theoretical return on an investment with no risk of financial loss, typically represented by the yield on government securities.

Market Risk Premium

An additional expected return that investors demand for choosing to invest in the stock market over a risk-free investment, reflecting the extra risk assumed.

Average Stock

The average price of a company's stock over a specific period, which can indicate the stock's general trend.