A Performance Measure Is Said to Be Contaminated When

question 34

Multiple Choice

A performance measure is said to be contaminated when

• A)it does not measure all aspects of performance.
• B)it evaluates irrelevant aspects of performance.
• C)it is a subjective supervisory measure of job performance.
• D)it is not reliable over time.
• E)the overlap between actual job performance and the measure of job performance is maximized.

Comprehend the beta coefficient as a measure of a stock or portfolio's volatility in relation to the market, and its calculation for various portfolio scenarios.

Apply the concept of expected return on a portfolio, understanding the impact of diversification and the risk-free rate.

Calculate portfolio beta for mixed portfolios, including stocks, risk-free assets, and the market portfolio.

Determine the systematic risk of a portfolio and how different weightings of assets affect it.

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Definitions:

TVC

Total Variable Cost, which refers to the sum of all costs that vary with the level of output or production, such as raw materials and direct labor costs.

TC

An abbreviation for Total Cost, it quantifies the overall expense incurred in the production of goods or services, encompassing both fixed and variable costs.

Diseconomies of Scale

The phenomenon where production costs per unit increase as a firm's output expands, often due to complexities and inefficiencies at larger scales.

Long-Run Average Total Cost

The cost per unit of output incurred when all factors of production, including capital, are variable, indicating the lowest possible cost of production for each level of output when the scale of operation is changed.