The basic principle underlying activity-based costing is that multiple choice an activity, which is a task, operation or procedure is what causes costs to be incurred costs are assigned directly to the unit produced at the same proportions. costs are allocated within each department using a volume-based factor. all costs are fixed and use a single rate.

Security a has a higher standard deviation of returns than security b. we would expect that: (i) security a would have a risk premium equal to security b. (ii) the likely range of returns for security a in any given year would be higher than the likely range of returns for security b. (iii) the sharpe ratio of a will be higher than the sharpe ratio of b. (a) i only (b) i and ii only (c) ii and iii only (d) i, ii and iii