23-71 Which of the Following Is a Good Strategy to Adopt

question 76

Multiple Choice

23-71 Which of the following is a good strategy to adopt when interest rates are expected to rise?

• A)Buying a call option on a bond.
• B)Writing a call option on a bond.
• C)Writing a put option on a bond.
• D)Buying bond futures.
• E)All of the above.

---

Definitions:

Equivalent Units

A method used in cost accounting to express the amount of work done by incomplete units in terms of fully completed units.

Conversion Costs

Costs incurred during the transformation of raw materials into finished goods, typically including labor and overhead expenses.

Whole Units

The number of units in production during a period, whether completed or not.

Conversion Cost

The total cost of converting raw materials into finished products, including both direct labor and manufacturing overhead expenses.