Which One of the Following Statements Does NOT Explain Why

question 10

Multiple Choice

Which one of the following statements does NOT explain why some stocks of some companies are better hedges against inflation than others?

• A) Their earnings are less-inflation sensitive.
• B) Defense contractors are well-equipped to pass along price changes.
• C) Electric utilities are very free to pass along cost increases despite the regulatory aspects of the business.
• D) Electric utilities are constrained in their ability to pass along price changes due to the regulatory nature of the business..

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Definitions:

Time Tickets

Documents used to record the amount of time an employee spends on various tasks, which is useful for cost accounting purposes.

Materials Requisitions

Documents used to request and track the transfer of materials from inventory for production or other uses within a company.

Work in Process Inventory

Items that are currently being manufactured but have not yet reached completion.

Direct Materials

Raw materials that can be directly traced to the manufacturing of a product, directly contributing to its production.