Scenario - Aero,Inc. Aero,Inc.started from the Idea of Brad Aerostle of Madison,South Dakota

question 54

Multiple Choice

Scenario - Aero,Inc.
Aero,Inc.started from the idea of Brad Aerostle of Madison,South Dakota in 1992.Brad earned a financial degree from Harvard and had watched the financial markets for years.Armed with college credentials and knowledge,he believed he could offer needed services to individuals and companies desiring to conduct business around the globe.From the minute Brad put his idea into motion,his brainchild - Aero,Inc.- proved quite profitable.
Aero,Inc.currently has over five thousand clients ranging from slightly wealthy individuals to very rich and thriving corporations around the world.Brad's skill at what he does has made his company a sought out firm by those who want to prosper in the foreign marketplace.
-When Aero,Inc.recommends purchasing futures contracts to its clients,it always informs the clients of the rather small commitment fee that is needed to purchase a futures contract.Which one of the following best identifies what this fee is called?

• A) Weighted average cost of capital
• B) Margin
• C) Put option
• D) Beta risk
• E) Margin call

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Definitions:

Hostile Witness

A witness whose testimony is not favorable to the party who has called them to testify, often leading to cross-examination.

Legal Advice

Advice given by an expert in law on legal matters or steps to be taken under particular circumstances.

Hypothetical Question

A type of query that is based on imagined or theoretical circumstances, often used for speculation or to explore outcomes.

Hearsay Rule

A legal principle that excludes the use of secondhand testimony in court because it is not made under oath or subject to cross-examination.