Which of the Following Is an Example of an Ad

question 20

Multiple Choice

Which of the following is an example of an ad valorem tariff?

• A) A 15% tariff on the value of a shipment of t-shirts
• B) A $10 tariff on each barrel of petroleum
• C) A 20% discount on the value of peaches delivered in October, November, or December
• D) None of these are correct

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Definitions:

Expiration

The end of the life of a financial instrument or contract, after which it ceases to be valid.

Call Option

A financial contract that gives the buyer the right, but not the obligation, to buy a stock, bond, commodity, or other asset at a specified price within a specific time period.

Expiration

The date on which a derivative contract such as an option or futures contract becomes void and the right to exercise it no longer exists.

Arbitrage Opportunity

A situation where a trader can profit from differences in price of the same asset in different markets without taking on any risk.