For a Firm That Makes Heavy Use of Float, Being

question 91

True/False

For a firm that makes heavy use of float, being able to forecast its collections and disbursement check clearings is essential.

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Definitions:

Call Option

A financial contract giving the buyer the right, but not the obligation, to purchase a stock, bond, commodity, or other asset at a specified price within a specific time period.

Striking Price

The fixed price at which the holder of an option can buy (in the case of a call) or sell (in the case of a put) the underlying asset.

Return on Investment

A measure used to evaluate the efficiency of an investment or compare the efficiency of several investments, calculated as the return divided by the cost of the investment.

Dividends

Distributions from a company to its shareholders, symbolizing a share of the company's earnings.