All of the Following Are Roles of a Exchange EXCEPT

question 12

Multiple Choice

All of the following are roles of a exchange EXCEPT

• A)instituting margin requirements on futures contracts.
• B)marking to market at the end of each day.
• C)eliminate the need for buyers and sellers of futures contracts to be concerned about the creditworthiness of each other.
• D)reducing the default risk involving forward contracts.

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Definitions:

Debt-to-Total-Assets Ratio

The debt-to-total-assets ratio is a financial metric that measures a company's leverage by comparing total debts to total assets.

Capital Structure

The manner in which a firm’s assets are financed; that is, the right side of the balance sheet. Capital structure is normally expressed as the percentage of each type of capital used by the firm such as debt, preferred stock, and common equity.

ROE

Return on Equity, a measure of financial performance calculated by dividing net income by shareholders' equity.

Debt-to-Total-Assets Ratio

A measure of a company's financial leverage calculated by dividing its total liabilities by its total assets, showing what portion of the assets is financed by debt.