Which of the Following Statements Are true

question 78

Multiple Choice

Which of the following statements are true?

• A) Futures contracts have less liquidity risk and credit risk than forward contracts.
• B) Futures contract prices are strongly linked to the prevailing level of the underlying spot index.
• C) Futures contract decrease in price, the further forward in time the delivery date is set.
• D) All of the above.
• E) None of the above.

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Definitions:

Predetermined Overhead Rate

A rate used to apply manufacturing overhead to products or job orders, calculated before the period begins based on estimated costs and activity levels.

Direct Labor-Hours

Overall work duration of employees directly involved in the production process.

Machine-Hours

A measure of production time that indicates the total hours a machine is in operation during a specific period.

Forming Department

A segment within a manufacturing facility where raw materials are shaped and formed into products.