DNA

question 9

Multiple Choice

DNA

• A) is single stranded.
• B) contains six different nucleotide bases.
• C) directs cellular function.
• D) contains the base uracil.

Comprehend the importance and use of derivatives in hedging financial risks.

Recognize the role of volatility in financial markets and its impact on derivatives trading.

Identify how firms use derivatives to manage exposure to various types of financial risks.

Understand the basic characteristics and uses of option contracts.

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Definitions:

Common Shares

Equity securities that represent ownership in a corporation, giving shareholders voting rights and a share in the company's profits through dividends.

Preferred Shares

A class of stock that provides shareholders with a priority claim on assets and earnings before common stockholders, usually including fixed dividend payments.

Stock Split

A corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares.

Par Value

The nominal or face value of a bond or stock as stated by the issuing company, not necessarily reflecting its market value.