Investing in Bonds Based on Interest Rate Expectations

question 54

Multiple Choice

Investing in bonds based on interest rate expectations

• A)can be a reliable strategy to enhance bond yields.
• B)can be costly if predictions on interest rates are incorrect.
• C)increases bond values if you move to long-term bonds when interest rates rise.
• D)works well when the yield curve is inverted.

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Definitions:

Actual Direct Labor Rate

The actual amount paid per hour to workers who are directly involved in the production of goods or services.

Labor Rate Variance

The difference between the actual cost of direct labor and the standard cost, indicating how well the company is managing its labor costs.

Direct Labor Standards

The expected amount of time and wage rate for workers to complete a unit of production.

Labor Efficiency Variance

A measure of the difference between the actual hours worked and the standard hours expected to produce a certain level of output.