An Agreement Between Two Parties to Exchange Specified Cash Flows

question 136

Multiple Choice

An agreement between two parties to exchange specified cash flows at specified intervals in the future is called a(n) ____________ contract.

• A) Floating.
• B) Spot.
• C) Option.
• D) Futures.
• E) Swap.

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Definitions:

Accounts Payable

Liabilities owed by a business to its suppliers or vendors for goods and services purchased on credit.

Dividends

Portions of a company's earnings paid out to shareholders as a reward for their investment.

FOB Destination

A shipping term indicating that the seller is responsible for goods and shipping costs until the goods reach the buyer's specified location.

Merchandise

Goods bought for the purpose of resale at a profit.