Financial Risk Manager Part 1

Explanation

Seasonal variation refers to predictable patterns that occur at regular intervals within a year, typically due to seasonal factors like weather, holidays, or cultural events.

Let's analyze each option:

A. Flower sales - This shows clear seasonal variation. Flower sales typically increase during holidays (Valentine's Day, Mother's Day), wedding seasons, and springtime.

B. Sales of Suntan oil - This exhibits strong seasonal variation, with higher sales during summer months when people spend more time outdoors in sunny weather.

C. Use of electricity - This shows seasonal patterns, with higher usage during summer (air conditioning) and winter (heating), and variations based on daylight hours and temperature.

D. Annual earnings of a limited liability company - This does not represent seasonal variation. Annual earnings are aggregated over an entire year, so they cannot show within-year seasonal patterns. While quarterly earnings might exhibit seasonality (e.g., higher sales during holiday quarters), annual earnings smooth out these seasonal effects.

The key distinction is that seasonal variation must occur within a single year and repeat annually. Annual earnings represent a yearly total, not intra-year patterns.