A Difference Between Explicit and Implicit Costs Is That

question 126

Multiple Choice

A difference between explicit and implicit costs is that

• A)explicit costs must be greater than implicit costs.
• B)explicit costs do not require a direct monetary outlay by the firm, whereas implicit costs do.
• C)implicit costs do not require a direct monetary outlay by the firm, whereas explicit costs do.
• D)implicit costs must be greater than explicit costs.

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Definitions:

London Interbank Offer Rate

An interest rate average calculated from estimates submitted by leading banks in London that indicates the rate at which banks lend to one another.

Eurodollar Loans

Financial loans that are denominated in U.S. dollars but are held in banks outside the United States.

Overnight

In financial terms, this refers to transactions that are settled or occur from one business day to the next.

Cross-Rate

The exchange rate between two currencies calculated by using a third currency, typically the US dollar, as a reference point.