Suppose the Interest Rate in Canada Falls and the Interest

question 42

Multiple Choice

Suppose the interest rate in Canada falls and the interest rate in Japan remains the same. Interest rate parity implies that given equal risk,

• A)the inflation rate is higher in Japan.
• B)Japanese financial investments are more profitable.
• C)the yen is expected to depreciate against the dollar.
• D)the yen is expected to appreciate against the dollar.
• E)Canadian financial investments are less profitable.

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Definitions:

Labor Rate Variance

This measures the difference between the actual wages paid to workers and the expected wages as per standard cost for the actual labor hours worked.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected overhead based on standard costs.

November

The eleventh month of the Gregorian calendar, following October and preceding December.

Variable Overhead Efficiency Variance

The difference between the expected and actual variable overhead costs, based on the efficient use of production resources.