Which of the Following Statements Is NOT True of Term

question 27

Multiple Choice

Which of the following statements is NOT true of term deposits?

• A) They are less liquid than a current deposit.
• B) They usually offer a higher return than a current deposit.
• C) They are attractive to investors who expect interest rates to fall.
• D) They are generally negotiable instruments.

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Definitions:

High-Low Method

A way to estimate the fixed and variable components of a cost by analyzing the highest and lowest activity levels and their associated costs.

Fixed Cost

Expenses that do not change in proportion to the activity of a business, such as rent, salaries, and loan payments.

Machine Hours

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

High-Low Method

An approach to estimate fixed and variable costs from the highest and lowest activity levels.