Financial Markets Allow for All but Which One of the Following

question 10

Multiple Choice

Financial markets allow for all but which one of the following?

• A) Shift consumption through time from higher income periods to lower
• B) Price securities according to their riskiness
• C) Channel funds from lenders of funds to borrowers of funds
• D) Allow most participants to routinely earn high returns with low risk

---

Definitions:

Overhead Rates

The method used to allocate indirect costs, such as utilities or rent, to products or services based on predetermined criteria, often as a rate per unit of activity.

Activity Cost Drivers

Factors that influence the costs of business activities, often used in activity-based costing to allocate costs more accurately.

ABC Costing System

Activity Based Costing system; a method of cost accounting that identifies and assigns costs to specific activities involved in the production process to better understand overhead costs.

Plantwide Overhead Rate

A single overhead absorption rate used throughout an entire plant or company to allocate indirect costs to products.