A Stock Whose Rate of Return Fluctuates Less Than the Rate

question 13

Multiple Choice

A stock whose rate of return fluctuates less than the rate of return of a market portfolio will have a beta that equals

• A)1)
• B)less than 1.
• C)more than 1.
• D)Either A or C above

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Definitions:

Relevant Cost Decision Model

A decision-making tool that focuses on the costs directly related to a specific business decision, ignoring sunk costs and irrelevant expenses.

Recognises Revenues

The process of recording income in the financial statements when it is earned, according to the criteria set out in accounting standards.

Joint Cost Allocation

The process of distributing the costs of production that are incurred in producing multiple products at the same point of the process across those products.

Joint Costs

Costs that are incurred up to a split-off point in the production process, making them inseparable costs shared by more than one product.