A Contract That Pays the Par Value of a Loan

question 19

Multiple Choice

A contract that pays the par value of a loan in the event of default is a

• A)put option.
• B)call option.
• C)digital default option.
• D)futures option.
• E)credit spread call option.

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Definitions:

1099 Form

An IRS tax form used to report various types of income other than wages, salaries, and tips.

Untaxed Income

Income that is not subject to taxation by the authorities.

1040EZ Form

A simpler version of the IRS tax form for individuals with straightforward financial situations, no longer in use as of the 2018 tax year.

Single

Filing status for unmarried taxpayers that is indicated on tax forms which determine the tax rate paid.