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You Are Interested in Leasing an Automobile for Your Company

question 7

Multiple Choice

You are interested in leasing an automobile for your company.You find that the lessor is offering you a 5-year lease on a car when the economic life on this car is considered to be 5.5 years.What type of lease must this be classified as if you agree to the terms?


Definitions:

Value Weighted Index

An index in which each constituent is weighted according to its market value, reflecting the performance of the market based on total capitalization.

Share Weighted Index

A stock market index in which each company is weighted according to the total value of its outstanding shares.

Price Weighted Index

A stock market index in which each company's stock influences the index in proportion to its price per share.

Adjustable Rate Mortgage

A type of mortgage in which the interest rate applied on the outstanding balance varies throughout the life of the loan according to market conditions.

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