Suppose a Graph with Ron's Weight on the Vertical Axis

question 54

Multiple Choice

Suppose a graph with Ron's weight on the vertical axis and his consumption of ice cream on the horizontal axis indicated that for each serving of ice cream he ate, Ron would gain 3 pounds, regardless of how much ice cream he had already eaten.This graph would show a

• A)horizontal line at weight = 3
• B)straight line with slope = 3
• C)straight line with slope = 1/2
• D)straight line with slope = -3
• E)straight line with slope = -1/3

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Definitions:

Strike Price

The preset price at which the holder of an option can buy (call) or sell (put) the underlying security.

Forward Contract

A financial agreement between two parties to buy or sell an asset at a specified future time at a price agreed upon today.

Forward Rate

The interest rate agreed upon now for a loan to be made or currency to be delivered at a future date, used in forward contracts and currency exchange.

Future Spot Rate

The anticipated exchange rate at which one currency will be exchanged for another in the spot market at a future date.