FIs Are Competing Directly with Loan Commitments, One of Their

question 73

Multiple Choice

FIs are competing directly with loan commitments, one of their own OBS products, when they also offer:

• A)Futures contracts.
• B)Swaps.
• C)Standby letters of credit.
• D)Forward contracts.
• E)When-issued trading.

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Definitions:

Budget Variances

The differences between budgeted amounts and actual amounts.

Machine-Hours

An allocation base in cost accounting used to assign costs to products or services, based on the hours of machine operation required.

Fixed Manufacturing Overhead

Consists of manufacturing costs that do not change with the level of production, such as salaries of supervisors and rent for factory premises.

Denominator Level

The level of activity used to compute the fixed manufacturing overhead rate in absorption costing, affecting inventory and cost of goods sold.