Which of the Following Is True

question 213

Multiple Choice

Which of the following is true?

• A) The CME eurodollar futures contract has a tick value (for one full basis point equivalent) of USD25 and a face value of USD 1,000,000
• B) The Euronext. LIFFE EURIBOR futures contract has a tick value (for one full basis point equivalent) of EUR25 and a face value of EUR 1,000,000
• C) The Euronext.LIFFE CHF futures contract has a tick value (for one full basis point equivalent) of CHF25 and a face value of CHF 1,000,000
• D) All of the above

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Definitions:

Capital Markets

Financial markets where debt or equity-backed securities are traded, facilitating the raising of capital by companies and governments.

EBIT-EPS Analysis

A study conducted to determine the impact of debt on a company's earnings before interest and taxes (EBIT) and its earnings per share (EPS).

Leverage

The employ of various financial instruments or borrowed capital, like debt, to increase the potential return of an investment.

Degree of Financial Leverage

A measure that assesses the sensitivity of a company's earnings per share to fluctuations in its operating income, based on its use of fixed-cost financing.