A Futures Contract Is an Agreement

question 4

Multiple Choice

A futures contract is an agreement:

• A) that obligates a corporation to issue additional securities at a specified date in the future.
• B) to exchange financial assets on a specified date in the future with the price determined on that date.
• C) to deliver goods today in exchange for an agreed upon payment to be paid on a specified date in the future.
• D) to exchange a specified quantity of goods on a specified date in the future at the current market price.
• E) to exchange goods on a specified date in the future at a price that is agreed upon today.

---

Definitions:

Regressive

A term used to describe a tax system in which the tax rate decreases as the taxpayer's income increases, placing a larger burden on lower-income earners.

Ability-to-Pay Principle

A taxation principle that argues taxes should be levied according to an individual's or entity's capability to bear the tax burden.

Income Taxes

Taxes levied by governments on individuals or corporations' income, where the tax rate may increase as the taxable amount increases.

Excise Taxes

Taxes imposed on the sale of specific goods and services, such as tobacco, alcohol, and gasoline, usually aimed at discouraging their consumption or generating revenue.