- CFA Exams
- CFA Level I Exam
- Topic 5. Equity Valuation
- Learning Module 22. Industry and Company Analysis
- Subject 2. Income Statement Modeling: Operating Costs and Non-Operating Costs
CFA Practice Question
If an industry enjoys economies of scale, its ______ tend to be positively correlated with its sales levels.
II. gross margin.
III. operating margin.
I. average cost.
II. gross margin.
III. operating margin.
Correct Answer: II and III
Gross and operating margins that are positively correlated with sales provide evidence of economies of scale in an industry.
User Contributed Comments 0
You need to log in first to add your comment.