If You Were Required to Estimate the Average Return for One

question 93

Multiple Choice

If you were required to estimate the average return for one category of securities for the coming year,history tells us that you should have the greatest degree of confidence estimating which of the following?

• A)Long-term government bonds
• B)3-month U.S.Treasury bills
• C)Small-company stocks
• D)Large-company stocks

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Definitions:

Machine Hours

A measure of the actual time a machine is operated, used in calculating manufacturing costs and setting factory overhead rates.

Overapplied Amount

This is an accounting term referring to a situation where the actual manufacturing overhead cost is less than the overhead cost applied to production, resulting in a surplus.

Factory Overhead

All indirect costs associated with manufacturing, including utilities, indirect labor, and materials not directly traceable to a product.

Machine Hours

A measure of the amount of time a machine is operated within a given period, used in cost accounting to allocate manufacturing overhead costs to products.