Collateral Is an Item of Value Used to Secure the Principal

question 9

True/False

Collateral is an item of value used to secure the principal portion of a loan.

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Definitions:

Expiration Time

The specific date and time when an options or futures contract becomes void and the rights to exercise it cease.

Call Contract

An options contract that gives the holder the right to buy an underlying asset at a specified price within a certain period.

Write

In finance, this term often refers to the act of selling a derivative contract, such as an option, thus obligating the writer to fulfill the contract terms if exercised.

Profit

Profit is the financial benefit that is realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.