Which One of the Following Premiums Is Compensation for Expected

question 57

Multiple Choice

Which one of the following premiums is compensation for expected future inflation?

• A)default risk
• B)taxability
• C)liquidity
• D)inflation
• E)interest rate risk

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Definitions:

Management By Exception

The review of budget reports by top management focused entirely or primarily on differences between actual results and planned objectives.

Materials Quantity Variance

The difference between the expected quantity of materials to be used in production and the actual quantity used, calculated in terms of cost.

Standard Quantity

The expected amount or volume of a specific input or material required in the production of goods or services.

Materials Price Variance

The difference between the actual cost of materials and the expected cost based on standard pricing, used to evaluate cost management.