The Owner of a Futures Contract Has the Right, but Not

question 36

True/False

The owner of a futures contract has the right, but not the obligation, to buy or sell at the contracted price.

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Definitions:

Credit Sales

Sales made by a business for which payment is received at a later date, extending credit to the buyer.

Cash Collections

are the payments received by a company from its customers in exchange for goods or services sold on credit.

Cumulative Surplus

The total amount of net income that a company retains over its life, after distributing dividends to shareholders.

Minimum Cash Balance

Minimum Cash Balance is the lowest amount of cash that a company seeks to maintain in its accounts to ensure financial stability and meet immediate operational needs.