Subject: Financial Accounting A purchase commitment represents a What?1) A firm order to buy2) A contingent asset3) A sale on credit4) An option to purchase

1) A firm order to buyThis is right. A purchase commitment implies a binding contract with respect…

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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3 POINTS
4 PTS
NO WRONG SOLUTION
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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
The seller of an option contract has the to buy or sell the underlying asset while the buyer of an option contract has the to buy or sell the underlying asset. O O O A right; obligation B с D obligation; right right; right obligation; obligation
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.
Which of the following gives the holder the right to sell the asset at a specified strike price? OA. A stock OB. A put OC. An ETF OD. A future contract OE. A call
Which of the following gives the holder the right to buy the asset at a specified strike price? OA. A future contract OB. A put OC. An ETF OD. A stock OE. A call

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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