The Act of Buying a Commodity in One Market at a Lower

question 65

Multiple Choice

The act of buying a commodity in one market at a lower price and selling it in another market at a higher price is known as:

• A) buying long.
• B) selling short.
• C) a tariff.
• D) arbitrage.

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Definitions:

Cash Flow

The net amount of cash being transferred into and out of a business, affecting its liquidity.

Creditors

Entities or individuals that a company or person owes money to.

Principal Repaid

The portion of a loan payment that goes toward reducing the original loan amount, as opposed to the portion that goes toward paying interest.

Interest Paid

The amount paid over a period for borrowing money, typically expressed as an annual percentage rate.