Which of the Following Statements Are TRUE

question 84

Multiple Choice

Which of the following statements are TRUE?

• A)A decrease in default risk on corporate bonds lowers the demand for these bonds,but increases the demand for default-free bonds.
• B)The expected return on corporate bonds decreases as default risk increases.
• C)A corporate bond's return becomes less uncertain as default risk increases.
• D)As their relative riskiness increases,the expected return on corporate bonds increases relative to the expected return on default-free bonds.

---

Definitions:

Direct Labor Cost

The expense incurred by companies for wages, benefits, and other costs directly associated with the employment of workers who physically produce a product or service.

Equivalent Finished Units

A calculation in cost accounting that converts partially completed goods into a number of complete units for inventory costing purposes.

Direct Labor

The cost of wages for workers directly involved in the manufacturing or production of goods.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product and are considered variable costs.