Individual Investors Can Reduce Transactions Costs by

question 6

Multiple Choice

Individual investors can reduce transactions costs by

• A) buying common stock rather than bonds.
• B) combining their purchases through an intermediary.
• C) purchasing common stocks directly, rather than through a mutual fund.
• D) making loans directly, rather than depositing funds in a bank.

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Definitions:

Materials Price Variance

The difference between the actual cost of direct materials and the expected cost at standard prices.

Materials Quantity Variance

The difference between the actual amount of materials used in production and the standard amount expected, multiplied by the standard cost per unit.

Materials Price Variance

The difference between the actual cost of materials purchased and the standard cost, multiplied by the quantity of materials purchased.

Raw Materials Price Variance

The difference between the actual cost of raw materials and the expected (or standard) cost.