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:

Net Income

The amount of earnings left after all expenses, taxes, and costs have been subtracted from total revenue.

FMV

Fair Market Value, an estimate of the market value of a property or asset, based on what a knowledgeable, willing, and unpressured buyer would likely pay to a knowledgeable, willing, and unpressured seller in the market.

Tax Depreciation

The deduction of a portion of the cost of a business asset from taxable income over the asset's useful life, as allowed by tax laws.

Taxable Income

The amount of income used to calculate how much tax an individual or a company owes to the government, after all deductions and exemptions.