The Spot Price on Cocoa Is $2,880 a Ton

question 62

Multiple Choice

The spot price on cocoa is $2,880 a ton. The futures price is $2,730 a ton. The basis is _____ and the market is a(n) _____ market.

• A) -150; carrying-charge
• B) -150; inverted
• C) 50; inverted
• D) 150; carrying-charge
• E) 150; inverted

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Definitions:

Earnings Per Share

A company's profit divided by the number of outstanding shares of its common stock.

Equity Multiplier

A financial leverage ratio that indicates the portion of a company’s assets that are financed by stockholder's equity, calculated by dividing total assets by total shareholders' equity.

Financial Leverage

Use of borrowed funds to increase the potential return of an investment.

Basic Earning Power

A financial metric that measures a firm's ability to generate earnings from its operations before the impact of taxes and financing costs.