Which of the Following Statements Is True

question 35

Multiple Choice

Which of the following statements is true?

• A)A very actively traded spot contract is the spot rate agreement (SRA).
• B)A very actively traded spot contract is the futures rate agreement (FRA).
• C)A very actively traded forward contract is the forward rate agreement (FRA), commonly used to lock in the interest rate on shorter term borrowings.
• D)A very actively traded spot contract is the option rate agreement (ORA), commonly used to grant the right to buy or sell an asset at a specified price.

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Definitions:

Net Sales Revenue

The total revenue from sales of goods or services after deducting returns, allowances, and discounts.

Gross Profit Rate

Is the ratio of gross profit to net sales, expressing the efficiency with which a company utilizes its resources to make a profit.

Cost of Goods Sold

The immediate expenses linked to the creation of products sold by a firm, encompassing materials, workforce, and indirect costs.

Periodic Inventory System

A method of inventory valuation for financial reporting purposes where a physical count of the inventory is taken at specified intervals.