What is an activity variance and what does it mean?

Q: Which Variable Is most critical in Sensitivity Analysis?

A: Sensitivity analysis helps to analyze the project by considering different variables. It helps…

Q: How do you decide if the variance is favorable or unfavorable?

A: The discrepancy between budgeted and actual amounts is known as a "variance" in the accounting…

Q: What is the expected return? What is the variance? What is the standard deviation?

A: State Probability Returns       Boom 0.25 0.15 Normal 0.50 0.08 Slow down 0.15 0.04…

Q: What are the different variables in sensitivity analysis?

A: Answer: Under a given set of expectations, a sensitivity analysis describes the way different values…

Q: Which one of the following measures is relevant for assessing exposure to systematic risk?

A: Systematic Risk: It refers to the risk caused by factors that are not in the control of an…

Q: Which cell or column is used for the covariance?

A: Here, Probability Stock Fund Rate of Return A B 0.1 -34% 0.2 -20% 0.3 21% 0.4 36%…

Q: what are the possible causes of adverse Material usage variance

A: The variation in material consumption is determined as the difference between the quantity of actual…

Q: Explain favourable variance.

A: Definition:   Variance analysis: Variance analysis is the process of evaluating the differences…

Q: Calculate the following and determine if variances are favorable

A: Compute the total standard material cost.

Q: Explain what is meant by and the limits of mean variance analysis when it comes to investment…

A: Mean-Variance Analysis is an investment decision tool technique that is used by investors to make…

Q: What is trend analysis and what purpose d

A: Trend Analysis: Trend Analysis is a statistical method that attempts to determine upcoming movements…

Q: What is the coefficient of variation over the same period?

A: The coefficient of variation (CV) is a statistical measure used to assess the relative variability…

Q: Define What are trendlines?

A: Technical Analysis: It is the study of price movement of the security. It involves study of chart…

Q: Define variance

A: Variance in statistics is the calculation of the distribution in an information source between the…

Q: Distinguish between a favorable variance and an unfavorable variance.

A: Favorable Variance: Favorable variance is the variation in the actual and planned output which is…

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.