Derivatives Can Be Used to Reduce Risk, but They Also

question 36

True/False

Derivatives can be used to reduce risk, but they also can be a source of risk in themselves.

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Definitions:

Ceilings For Taxes

Limits set for the amount of taxes that can be imposed or charged by a government or regulatory entity.

Social Security Tax

A mandatory tax levied on both employers and employees to fund the Social Security program.

Medicare Tax

A federal tax that funds Medicare, a health care program for individuals who are 65 and older, which is deducted from employees' paychecks.

State Unemployment Tax

Taxes imposed by states on businesses to fund state unemployment insurance programs.