What Will Happen to the Market Value of a Bond

question 16

Multiple Choice

What will happen to the market value of a bond if interest rates increase?

• A)The market value will decrease
• B)The market value will increase
• C)The market value will increase or decrease, depending on the general economic climate
• D)The market value should remain level

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Definitions:

Actual Direct Labour Rate

The real wage rate paid for the hours that direct laborers work, differing from initially estimated or standard rates.

Standard Direct Labour Rate

The pre-established amount paid per unit of work or hour of labor to employees directly involved in manufacturing.

Materials Price Variance

A financial metric measuring the deviation between the budgeted or standard cost of materials and the actual cost incurred.

Variable Manufacturing Overhead Cost Incurred

The total variable costs that have been spent during a particular period for activities related to manufacturing overhead.