Futures Markets Are Common in Commodities, Financial Instruments, And

question 46

Multiple Choice

Futures markets are common in commodities, financial instruments, and:

• A) nowhere else.
• B) some barter markets in third-world countries.
• C) currencies.
• D) telecommunications.

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Definitions:

Acquisition Cost

The total cost that a company recognizes on its financial statements for acquiring an asset or taking over another business.

Time Value of Money

The principle that a certain amount of money today is worth more than the same amount in the future due to its potential earning capacity.

Discount Rate

The interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows, reflecting the time value of money and risk.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return.