Counterparty Risk Is

question 37

Multiple Choice

Counterparty risk is

• A) present only with exchange-traded options.
• B) based on the notional amount of the contract.
• C) the risk of loss if the other party to a financial contract fails to honor its obligation.
• D) eliminated by the use of insurance funds.

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Definitions:

Fixed Assets

Fixed assets are long-term tangible pieces of property or equipment that a firm owns and uses in its operations to generate income.

Statement Of Cash Flows

A firm’s financial statement that summarizes its sources and uses of cash over a specified period.

Accounts Receivable

Unpaid customer accounts for delivered goods or services to a company.

Operating Activities

Activities related to the daily operations of a business, such as selling products, managing costs, and paying employees, as reflected in the company’s cash flow.