An Example of a Derivative Security Is ________

question 58

Multiple Choice

An example of a derivative security is ________.

• A) a common share of General Motors
• B) a call option on Intel stock
• C) a Ford bond
• D) a U.S. Treasury bond

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Definitions:

Revenue Variance

The difference between actual revenue and budgeted or forecasted revenue, indicating the effectiveness of business strategies.

Variable Cost Variances

Differences between the actual and expected or budgeted variable costs in the production process.

Denominator Activity

The activity level used to divide the total overhead in calculating the predetermined overhead rate, commonly representing capacity or expected usage.

Volume Variance

Volume variance measures the difference between the expected production volume and the actual production volume, impacting the budget and operational efficiency.