Which of the Following Statements Is True

question 2

Multiple Choice

Which of the following statements is true?

• A) A liquid asset is one that can be quickly and cheaply converted into cash.
• B) The demand for a bond declines when it becomes less liquid, decreasing the interest rate spread between it and relatively more liquid bonds.
• C) The differences in bond interest rates reflect differences in default risk only.
• D) The corporate bond market is the most liquid bond market.

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Definitions:

Labour Efficiency Variance

A measure used in cost accounting to evaluate the difference between the actual hours worked and the standard hours expected to produce a certain level of output.

Production Manager

The person responsible for overseeing the production process and ensuring that manufacturing runs smoothly and efficiently.

Management By Exception

A management system in which standards are set for various activities, with actual results compared to these standards. Significant deviations from standards are flagged as exceptions.

Actual

The real, measured or observed value of a quantity or cost, as opposed to estimated or budgeted figures.