In Portfolio Analysis, We Often Use Ex Post (Historical) Returns

question 21

True/False

In portfolio analysis, we often use ex post (historical) returns and standard deviations, despite the fact that we are really interested in ex ante (future) data.

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Definitions:

Direct Labor Hour

A measure of the amount of time spent by workers directly manufacturing a product or providing a service, used for cost allocation.

Fixed Factory Overhead Volume Variance

A variance that measures the difference between the budgeted and actual fixed factory overhead costs, attributing changes to fluctuations in production volume.

Fixed Overhead

Costs associated with running a business that do not change with the level of production or sales, such as rent, salaries, and insurance.

Variable Overhead Rate

Variable Overhead Rate is the portion of indirect manufacturing costs that varies in proportion to production volume or activity levels, such as utilities or raw materials.