What Is a 'Guarantee

question 11

Multiple Choice

What is a 'guarantee'?

• A)An arrangement in which a secured creditor has the right to sell the charged property on default by the debtor.
• B)A type of mortgage.
• C)An arrangement in which a person promises to repay a loan in the event that the debtor fails to do so.
• D)Security for a loan to a company over a particular asset or class of assets.

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Definitions:

Rate of Return

The net gain or loss on an investment over a specified time period, expressed as a percentage of the investment's initial cost.

Short 1,000 Shares

The act of selling 1,000 shares of a stock that the seller does not own, with the expectation of buying them back at a lower price for a profit.

Repurchase

The act of a company buying back its own shares from the marketplace, which can affect the stock price and shareholder equity.

Initial Margin

The upfront collateral required to open a position in the futures or derivatives market.