Which Statement Is Correct About an Equity Instrument

question 79

Multiple Choice

Which statement is correct about an equity instrument?

• A)A contract whose value changes according to a specified variable, requires little or no initial investment and is settled at a future date.
• B)A contract that gives the holder the residual interest in an entity after deducting all of its liabilities.
• C)Any contract that entitles the holder to joint interest in an entity after deducting all of its liabilities, and is settled at a future date.
• D)Any contract that gives rise to a financial asset for one entity and a financial liability or equity instrument for another entity.

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Definitions:

Oil Price Shocks

Sudden and significant changes in the global price of oil, which can lead to economic instability and affect global markets.

Supply-Side Economists

Economists who believe that reducing tax rates and deregulating markets to facilitate the supply of goods and services are the best ways to stimulate economic growth.

High Tax Rates

Elevated percentages of an individual's or company's income that must be paid to the government, affecting disposable income and investments.

Laffer Curve

A theoretical representation suggesting that there is an optimal tax rate that maximizes revenue without discouraging economic activity.