Derivative Markets Exist to Allow For

question 31

Multiple Choice

Derivative markets exist to allow for:

• A) allow for the transfer of risk.
• B) direct transfers of common stocks for bonds.
• C) cash receipts from the sale of bonds.
• D) reduced information asymmetry.

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Definitions:

Culture

The shared values, beliefs, norms, and practices that characterize a group of people or society.

Bond Payable

A long-term debt instrument issued by corporations or governments, obliging the issuer to pay back the principal along with interest at a specified future date.

Financing Activities

Actions leading to alterations in the magnitude and structure of a corporation's equity and debt.

Statement of Cash Flows

An accounting summary that shows the overall cash received by a business from its operational activities and investment income, and the cash expended on its business processes and investment opportunities during a set period.