Assume That You Purchase and Will Hold Your Investment to Maturity

question 19

Multiple Choice

Assume that you purchase and will hold your investment to maturity or expiration. Which of the following instrument will have certainty future cash flows when you make your initial purchase?

• A) Futures.
• B) Put options.
• C) Stocks.
• D) Bonds.
• E) Call options.

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Definitions:

Earning A Profit

The financial gain realized when the total revenues generated from a business activity exceed the total costs associated with that activity.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of that good consumers are willing and able to purchase at various prices.

Monopolistically Competitive

A market structure characterized by many firms selling products that are similar but not identical, leading to competition based on product differentiation.

Monopoly

A market structure where a single firm controls the entire market for a particular good or service.