A Security Originally Sold by a Business or Government to Raise

question 57

Multiple Choice

A security originally sold by a business or government to raise money is called a(n) :

• A)derivative.
• B)primary asset.
• C)primary debt.
• D)futures contract.
• E)option contract.

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Definitions:

Interest

The charge for obtaining funds, often shown as a percentage of the loan amount.

Explicit Cost

Direct, out-of-pocket expenses incurred in the operation of a business, such as wages or rental payments.

Lease Payments

Regular payments made by a lessee to a lessor for the use of an asset.

Total Cost

represents the complete expense incurred in the production of goods or services, including both fixed and variable costs.