A Financial Instrument on Which a Futures Contract Is Based

question 44

Multiple Choice

A financial instrument on which a futures contract is based is called which one of the following?

• A)hedged security
• B)short position
• C)long position
• D)speculative asset
• E)underlying asset

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Definitions:

Net Operating Income

Income before interest and income taxes have been deducted.

Drop Product

A strategy or decision by a company to discontinue the production, sale, or support of a product line or item.

Special Order

A one-time order that is not considered part of the company’s normal ongoing business.

Variable Cost

A cost that varies, in total, in direct proportion to changes in the level of activity. A variable cost is constant per unit.