It Is Possible to Have a Favorable Direct Material Price

question 76

True/False

It is possible to have a favorable direct material price variance and an unfavorable direct material efficiency variance.

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Definitions:

Option Holder

An individual or entity that has the rights, but not the obligation, to buy or sell an asset at a predetermined price before or at the expiration of a contract.

Call Option

A financial contract that gives the buyer the right, but not the obligation, to buy an underlying asset at a specified price within a certain time period.

Put Option

A financial contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specific time frame.

Long Straddle

A long straddle strategy involves simultaneously buying a put and call option on the same asset with the same strike price and expiration date, benefiting from a strong move in either direction.