Which of the following is an estimate made without detailed knowledge of a project?
A) AFFINITY
B) QMT
C) AHE
D) DE
C
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If the auditor's assessment of audit risk is low (e.g., 1% rather than 5%), what is the effect on the amount of direct testing performed by the auditor?
a. Increase in direct testing. b. Decrease in direct testing c. No change in direct testing. d. Direct testing is not needed.
The International Auditing and Assurance Standards Board's term assurance engagement means the same as The American Institute of Certified Public Accountants' term attestation engagement
a. True b. False Indicate whether the statement is true or false
In a highly regulated, monopolistic industry, such as the electrical utility or TV cable, a cost management system is
a. of limited need because costs are typically passed along to customers via the rate structure. b. essential because of the need to provide the highest degree of cost efficiency possible for customers. c. critical to the needs of empowered employees making decisions at various levels of the organizational hierarchy. d. of no use because there is no attempt by management to control costs.
Stocks A and B are quite similar: Each has an expected return of 12%, a beta of 1.2, and a standard deviation of 25%. The returns on the two stocks have a correlation of 0.6. Portfolio P has 50% in Stock A and 50% in Stock B. Which of the following statements is CORRECT?
A. Portfolio P has a standard deviation that is greater than 25%. B. Portfolio P has an expected return that is less than 12%. C. Portfolio P has a standard deviation that is less than 25%. D. Portfolio P has a beta that is less than 1.2. E. Portfolio P has a beta that is greater than 1.2.