The Problem in Stretching Out the Maturity of Marketable Securities

question 38

Multiple Choice

The problem in stretching out the maturity of marketable securities is that

• A) you are legally locked in until the maturity date.
• B) longer term securities are often not available.
• C) there is greater possibility of loss.
• D) interest rates are generally lower.

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Definitions:

Materials Quantity Variance

The difference between the actual amount of materials used in production and the standard amount expected to be used, multiplied by the standard cost per unit.

Raw Materials Price

The cost of raw materials required in the manufacturing process, a critical factor in the overall production cost and pricing strategy.

Variance

The difference between a planned, budgeted, or standard amount and the actual amount incurred or realized.

Revenue Variance

The difference between actual revenue earned and expected revenue, often used in budgeting and financial analysis.