The 6 Month Interest Rate on 180 Day U

question 51

Multiple Choice

The 6 month interest rate on 180 day U.S.Treasury Bills is 7.5 percent.In the foreign exchange markets, the spot rate between U.S.dollars and Australian dollars is 1 Australian dollar= $0.452 and the 180 day (6 month) forward rate is 1 mark= $0.46.Determine the expected rate of interest on 6 month Australian government debt securities, assuming that the interest rate parity between the U.S.dollar and Australian dollar exists.

• A)7.35%
• B)1.77%
• C)5.63%
• D)3.82%

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Definitions:

Direct Labor

The labor costs that can be directly attributed to the production of goods or services, such as wages for workers who manufacture a product.

Work in Process

Inventory that includes goods partially through the manufacturing process but not yet completed.

Budgeted Fixed Manufacturing Overhead

This term refers to the projected fixed costs associated with the production process, including expenses that do not change with the level of production.

Standard Fixed Manufacturing Overhead Rate

A predetermined rate used in costing to allocate the estimated fixed manufacturing overhead costs to individual units of production based on a consistent activity base, such as machine hours or labor hours.