Which of These Is Not a Long-Term Source of Finance

question 3

Multiple Choice

Which of these is not a long-term source of finance?

• A)Finance lease.
• B)Trade credit.
• C)Ordinary shares.
• D)Mortgage.

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Definitions:

Firm Commitment

An agreement between a buyer and a seller wherein the seller is obligated to supply an agreed-upon amount of goods or services at a specified price.

Derivative Instrument

A financial security whose value is dependent upon or derived from an underlying asset or group of assets.

Options Contract

A financial derivative that gives the buyer the right, but not the obligation, to buy or sell an asset at a set price on or before a given date.

Future Contract

A standardized legal agreement to buy or sell something at a predetermined price at a specified time in the future.