In This Type of Arrangement, Any Balances Above a Certain

question 14

Multiple Choice

In this type of arrangement, any balances above a certain amount in a corporation's chequing account at the end of the business day are "removed" and invested in overnight securities that pay the corporation interest. This innovation is referred to as a ________.

• A) sweep account
• B) share draft account
• C) removed-repo account
• D) stockman account

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Definitions:

Forecasting Error

The difference between the actual value and the predicted value in forecasting, indicating the accuracy of the prediction.

Capital Expenditure

Resources allocated by a corporation to purchase or improve tangible assets like land, factories, or machinery.

Variable Costs

Costs that vary directly with the level of production or sales volume, such as raw materials and direct labor costs.

Contribution Margin

The amount by which sales revenue exceeds variable costs of production, indicating how much contributes to fixed costs and profits.