Statement 1: The onset of 5% inflation means that your receipt of a $100 interest payment allows you to purchase only $95 worth of goods and services. Statement 2: For the average rational investor or saver, there is an indirect, or inverse, relationship between the amount of risk exhibited by a security and the risk premium that would be required by the investor or saver. Statement 3: It is a mathematical impossibility for the expected future inflation rate to be greater than the real risk-free rate of return on an investment. Statement 4: All things being equal, savers and investors expect to receive some amount of maturity premium as compensation for their deferred consumption. The true statements are. a. 1 and 4b. 1 and 3c. 2 and 3d. 2 and 4

Activity-based costing (abc) is not truly a cost collection mechanism as much as it is an inventory valuation method. the main purpose for implementing an activity-based cost system is to try to overcome some of the cost distortions that occur in traditional costing from product differences when there are variations in size and complexity. however, one of the disadvantages of utilizing abc is that the additional information gathering necessary to implement costing with that level of detail might be beyond the reach of some companies with resource or financial constraints. with this in mind, what kinds of industries or companies do you think would benefit most from using activity-based costing and why? in designing or modifying an accounting system to capture appropriate costs for abc, what considerations do you think would need to be made?