Contracts for Difference

question 74

Multiple Choice

Contracts for difference:

• A)are only available to institutional investors
• B)are a low risk product that allows an investment in shares without the cost of buying the shares
• C)are exchange traded only
• D)enable investors to trade shares on a geared (or leveraged)basis
• E)have no risk of default

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Definitions:

Incremental Costs

Costs that change as a result of a new decision or alternative action, also known as marginal costs.

Incremental Costs

Incremental costs are the additional costs incurred when a business increases its level of operations or production.

Make or Buy

A decision-making process used by companies to determine whether to produce goods in-house or purchase them from an external supplier.

Incremental Costs

Costs that change depending on the level of production or an alternative course of action.