If a Is the Position in the Derivative, B Is

question 12

Multiple Choice

If A is the position in the derivative, B is the position in the underlying security, and C is a fixed- interest loan, a short synthetic position in the underlying security is represented as:

• A) C - A.
• B) A - B.
• C) - B.
• D) C + B.

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Definitions:

Current Liabilities

Short-term financial obligations of a company that are due to be paid within one year, including accounts payable, short-term loans, and accrued expenses.

Long-Term

Refers to assets, investments, or obligations that are expected to last or be in place for more than one year.

Interest Expense

The cost incurred by an entity for borrowed funds, usually shown as an expense on the income statement.

Interest-Bearing Note

A debt instrument that pays interest to the holder until maturity.