Which of the Following Is True of Equity Securities

question 39

Multiple Choice

Which of the following is true of equity securities?

• A)It refers to the technique of protecting against the potential losses that result from adverse changes in exchange rates.
• B)It refers to a loan from the investor to a company or government entity.
• C)It refers to the simultaneous and instantaneous purchase and sale of a currency for a profit.
• D)It refers to the practice of buying and selling a currency with the expectation that the value will change and result in a profit.
• E)It refers to the ownership of a part of a company.

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Definitions:

Current Costs

The costs that would have to be incurred to replace or reproduce an asset in the current period, under current market conditions.

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.

Net Income

The total earnings of a company after accounting for all expenses, taxes, and additional income streams, representing the company’s profit.

Inventory Levels

The quantity of goods and materials on hand available for sale or used in production at any given time within a business.