Which of the Following Statements Is FALSE

question 53

Multiple Choice

Which of the following statements is FALSE?

• A)Currency options allow firms to lock in a future exchange rate;currency forward contracts allow firms to insure themselves against the exchange rate moving beyond a certain level.
• B)Generally speaking,cash-and-carry strategies are used primarily by large banks,which can borrow easily and face low transaction costs.
• C)Currency options,like stock options,give the holder the right-but not the obligation-to exchange currency at a given exchange rate.
• D)Many managers want the firm to benefit if the exchange rate moves in their favor,rather than being stuck paying an above-market rate.

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Definitions:

Labor Rate Variance

The discrepancy between what labor actually costs and what was initially budgeted or considered as the standard labor cost.

Actual Results

The real outcomes or data obtained from an operation or process, often compared against planned or forecasted results.

Standard Cost System

A method of cost accounting that compares actual costs to predetermined standards, facilitating variance analysis to manage costs.

Standard Amount

The budgeted or pre-determined cost of materials, labor, and overhead that is used as a benchmark for actual costs.