Which of the Following Is an Example of a Fixed

question 81

Multiple Choice

Which of the following is an example of a fixed cost?

• A) Paper used in the manufacture of textbooks.
• B) Property taxes paid by a firm to a large city.
• C) The wages of part-time workers who are paid $8 per hour.
• D) Gasoline consumed by salespersons' cars.
• E) Surgical supplies used in a hospital's operating room.

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Definitions:

Expected Rate of Return

The anticipated yield or gain that an investor expects to earn on an investment, based on past or projected future performance.

Premium

The amount by which the price of something, especially a financial asset, exceeds its nominal or face value.

Strike Price

The fixed price at which the holder of an option can buy (in the case of a call) or sell (in the case of a put) the underlying security or commodity.

Stock Price

The cost of purchasing a share of a company's stock, representing ownership in the company and a claim on part of its assets and profits.