ECON 102 QUIZ 2 QUESTIONS AND ANSWERS

ECON 102 QUIZ 2 QUESTIONS AND ANSWERS 25. When using the economic order quantity model A) ordering costs increase as the level of inventory increases. B) carrying costs decrease as the level of inventory increases. C) costs are minimized when total carrying costs and total ordering costs are equal. D) none of the above Difficulty: Medium Type: Conceptual 26. Hedging A) is a way to protect your accounts receivable position. B) increases risk. C) is a legal agreement to buy or sell a financial futures contract. D) can be carried out with a futures contract. Difficulty: Medium Type: Conceptual 27. Which of the following is not a true statement about commercial paper? A) Finance paper is sold directly to the lender by the finance company. B) Finance paper is also referred to as direct paper. C) Dealer paper is sold directly to the lender by a finance company. D) Industrial companies, utility firms or finance companies too small to sell