Which of the Following Is True of a Premium

question 7

Multiple Choice

Which of the following is true of a premium?

• A) A premium is always given free as a goodwill item.
• B) To get a premium, a recipient must perform some action advantageous to the advertiser.
• C) A premium is less valuable than an advertising specialty.
• D) A premium encompasses the physical appearance of the container and includes design, color, shape, labeling, and materials.
• E) A premium includes product packaging and trade-show booths and exhibits.

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Definitions:

Futures Contract

A legally binding contract for the future transaction of goods or assets at a set price and predetermined date.

Cash Flows

Cash flows represent the net amount of cash and cash-equivalents being transferred into and out of a business, crucial for assessing its financial health, liquidity, and solvency.

Hedge

A strategy used in investing to minimize or offset the risk of adverse price movements in an asset.

Hedge Position

An investment made to reduce the risk of adverse price movements in an asset, often by taking an offsetting position in a related security.