The hedging principle implies that permanent asset investments not financed by spontaneous
sources should be financed with permanent sources, and temporary investments not financed by
spontaneous sources should be financed with temporary sources.
Indicate whether the statement is true or false
TRUE
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If some expense items are related to your income, and your income increases above budgeted amounts, you can expect
A) favorable variances in both income and expense accounts. B) budgeted savings to remain about the same. C) favorable income variances and unfavorable variances in related expenses. D) savings will decrease.
Howard Consumer Products has a small car division that operates as a profit center
Below is a partially completed responsibility report for the first quarter. Complete the responsibility report. (Round percentages to one decimal place.) Howard Consumer Products Responsibility Report Product Type Actual Results Flexible Budget Flexible Budget Variance (F or U) Sales Volume Variance Sales Revenue $688,200 $700,000 Variable Expense 309,000 320,000 Contribution Margin Traceable Fixed Expense 371,000 369,000 Divisional Segment Margin What will be an ideal response
Which type of risk is based on the financial integrity of a bond issuer?
A) liquidity risk B) call risk C) default risk D) interest rate risk
Mean reversion refers to the observation that
A) stock prices overact to news announcements. B) stocks prices are more volatile than fluctuations in their fundamental value would predict. C) stocks with low returns are likely to have high returns in the future. D) stocks with low returns are likely to have even lower returns in the future.