A Contract That Grants Its Buyer the Right, but Not

question 21

Multiple Choice

A contract that grants its buyer the right, but not the obligation, to sell an asset at a specified price is called a:

• A)futures contract.
• B)call option.
• C)preset contract.
• D)put option.
• E)primary contract.

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Definitions:

Current Liabilities

Short-term financial obligations of a company that are due to be paid within one year.

Retained Earnings

The portion of net income which is retained by the corporation rather than distributed to its owners as dividends.

COGS

Cost of Goods Sold (COGS) refers to the direct costs associated with the production of goods sold by a company, including material and labor costs.

Gross Margin

Revenue less cost where cost is spending closely associated with production. Stated in dollars or as a percent of revenue. A fundamental measure of a business’s strength.