The U.S. Treasury issues bonds where the return is indexed to the consumer price index. We should expect that these bonds, relative to other U.S. Treasury bonds, will have: highlight your answer
A. lower price and lower return due to the decreased risk.
B. lower price and a lower fixed return since the demand for them should be higher.
C. higher price and higher fixed return since we always seem to have some inflation.
D. higher price and lower return due to the decreased risk from inflation in holding these bonds.
2. The use of cash budgeting procedures
A. Helps the firm plan its current asset levels for a given production plan.
B. Makes managing inventory easier under seasonal production.
C. Illustrates fluctuating levels of current assets for a given production plan.
D. All of the options are correct.