A Player Would Use a Ratio Spread If

question 50

Multiple Choice

A player would use a ratio spread if:

• A) the price is expected to rise.
• B) he/she expects a large price change.
• C) the price is expected to fall.
• D) the timing of the underlying security is uncertain.

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Definitions:

Operating Cycle

The time it takes for a company to make an initial outlay of cash to produce goods or services and then receive cash back from selling these goods or services.

Accounting Cycle

The sequence of steps followed in the accounting process to record and summarize financial transactions throughout a period and prepare financial statements.

Journalizing Transactions

The process of recording business transactions in the journal as part of the accounting process.

Correcting Entries

Journal entries made to correct errors found in the financial statements.