If an Individual Expected Securities Prices to Fall,that Investor Could

question 21

Multiple Choice

If an individual expected securities prices to fall,that investor could
1) buy put options
2) sell a stock index futures contract
3) sell stock short

• A) 1 and 2
• B) 1 and 3
• C) 2 and 3
• D) all of these choices

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Definitions:

Money Multiplier

A concept in monetary economics that describes the maximum amount of money the banking system can theoretically generate with each unit of central bank money.

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Net Credit Sales

The total revenue from sales made on credit, minus any returns or allowances.

Times Interest Earned

Times interest earned, a financial metric, measures a company's ability to meet its interest payments on outstanding debt with its before-tax income.