Generally,which of the Following Is NOT True of Interest Rate

question 3

Multiple Choice

Generally,which of the following is NOT true of interest rate risk management techniques?

• A) Borrowers can protect themselves from upward movements in interest rates by using interest rate caps
• B) Borrowers can protect themselves from upward movements in interest rates by using interest rate futures contracts
• C) Borrowers can benefit from downward movements in interest rates by using interest rate caps
• D) Borrowers can benefit from downward movements in interest rates by using interest rate futures contracts

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Definitions:

Machine-Hours

A measurement of the amount of time a machine is operated, used as a basis for allocating machine-related costs to products.

Job-Order Costing

An accounting methodology that assigns costs to specific production batches or jobs, useful for custom or unique products.

Unit Product Cost

The calculated cost of a single unit of product that includes direct materials, direct labor, and manufacturing overhead.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products or job orders, calculated before the period begins based on estimated costs and activity levels.