4 PTS A purchase commitment represents a What?1) A firm order to buy2) A contingent asset3) A sale on credit4) An option to purchase

Why this is the right answer:1) Firm order to buyA purchasing promise is an agreement that is…

Answered: A purchase commitment represents a…

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter14: Security Structures And Determining Enterprise Values

Section: Chapter Questions

Problem 15DQ

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What is an option? OA) A contract that is derived from some other underlying quantity, index, asset or event. B) A contract that gives the holder the right to buy or sell something at a specified price. C) A contract that gives the holder the right to sell an instrument at a pre- specified price. D) A contract that gives the holder the right to acquire an instrument at a pre- specified price.
A contract requiring a specified future monetary payment at a specified future point in time in exchange for the delivery of a specific asset is called a: *A. nonconvertible option.B. hedge.C. long contract.D. swap.
Which of the following describes a short call option? O The obligation to buy an asset for a certain price The right to sell an asset for a certain price O The right to buy an asset for a certain price The obligation to sell an asset for a certain price
According to the fair value principle, assets and liabilities should be reported Select answer from the options below 1.at their fair market value. 2.at their historical cost. 3.at a value agreed upon by interested parties. 4.at cost plus inflation.
A call option holder has an obligation to sell the asset. True or false?
Which of the following describes a short put option? The obligation to sell an asset for a certain price The obligation to buy an asset for a certain price O The right to sell an asset for a certain price The right to buy an asset for a certain price
Provide answer
Which
A derivative is a financial instrument whose value is determined by _____________________. (Select two that apply) Select one or more: a. An underlying asset b. The features of the derivative itself c. Speculation d. A regulatory body such as the FTC
Creative negotiation techniques that establish deal structure such as offering owner financing , a lease option, or taking back a vehicle in lieu of a deposit, typically occur during which part of negotiation?
Define the terms, or give short explanations. -short sale/short selling -speculation -speculator -swap -swaption -theoretical fair value (of an asset) -underlying asset
Question 3 Which type of financial derivative gives the holder the right to buy an underlying asset at a specified price before a predetermined expiration date? A) Swap B) Forward contract C) Call option D) Put option

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A purchase commitment represents a What? 1) A firm order to buy 2) A contingent asset 3) A sale on credit 4) An option to purchase