Bond Payments Are Generally More Predictable Than Stocks Because

question 128

Multiple Choice

Bond payments are generally more predictable than stocks because

• A) interest on bonds is not taxable.
• B) stock prices and dividends exhibit little volatility.
• C) bonds generate higher average rates of return.
• D) bond owners know the size and timing of payments they will receive.

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Definitions:

Direct Labor-hours

The aggregate of hours expended by staff members actively participating in the manufacturing process, utilized to assign labor charges to various products.

Variable Overhead Efficiency Variance

This variance measures the difference between the actual hours taken to produce a good and the standard hours expected, multiplied by the variable overhead rate per hour.

Variable Overhead

Costs that vary in direct proportion to changes in the operational activity of a business, such as utility bills or raw material costs.

Budgeted Production

represents the amount of production planned for a future period as part of the budgeting process.