Which of the Following Statements Is FALSE

question 16

Multiple Choice

Which of the following statements is FALSE?

• A)Long-term supply contracts cannot be entered into anonymously;the buyer and seller know each other's identity.This lack of anonymity may have strategic disadvantages.
• B)A futures contract is an agreement to trade an asset on some future date,at a price that is locked in today.
• C)An alternative to vertical integration or storage is a long-term supply contract.
• D)Long-term supply contracts are unilateral contracts negotiated by a seller.

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Definitions:

Reward-to-Variability Ratio

A ratio used to evaluate the return of an investment relative to its risk, with a higher ratio indicating a more favorable risk-reward profile.

Risk-free Rate

A presumed income from an investment that is free from any financial risk, typically reflected through government bond yields.

Efficient Frontier

A set of optimal portfolios that offer the highest expected return for a defined level of risk or the lowest risk for a given level of expected return, used in modern portfolio theory.

Expected Return

The projected profitability of an investment over a given period.