Which of the Following Is an Example of Arbitrage

question 38

Multiple Choice

Which of the following is an example of arbitrage?

• A) An inventor of a new hydrocarbon cracking technology based on palladium buys this metal knowing that its price will rise when the technology is adopted.
• B) A metals merchant is offered $108,000 in one year for $100,000 of palladium today, when the interest rate is 10%.
• C) An investor, seeing that the price of palladium on the metals exchange in two different countries is slightly different, buys on one and sells on the other to make a profit.
• D) A firm buys $250,000 of palladium today, with an option to sell it at $275,000 in one year if interest rates rise above 10%.

Identify and record employer and employee responsibilities regarding FICA and unemployment taxes.

Understand sales tax collection and remittance requirements.

Grasp warranty liabilities estimation and recording procedures.

Understand and explain the concept of contingent liabilities and how they are reported in financial statements.

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Definitions:

Sac

A fluid-filled structure in the body which can enclose or secrete substances, as in cysts or secretory cells.

Hemoptysis

The expectoration (coughing up) of blood or bloody sputum from the lungs or airways.

Spitting

Ejecting saliva forcibly from one's mouth, sometimes as a response to an irritant or infection.

Basophil

A type of white blood cell involved in inflammatory reactions and allergic responses by releasing histamine and other mediators.