A Speculator Is Someone Who

question 134

Multiple Choice

A speculator is someone who

• A) buys a good for immediate consumption
• B) buys a good for a low price,hoping to sell it in the future for a higher price
• C) buys a good for one price and hopes to sell it for a lower price in the future
• D) sells a good for a lower price than its original purchase price
• E) sells all of his or her merchandise and then exits the market

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Definitions:

Initial Direct Costs

Expenses directly associated with obtaining or originating a financing lease, which are often deferred and amortized over the lease term.

Interest Rate Implicit

The interest rate implicit in a lease is the rate of interest that, when applied to the cash flows of the lease, causes the present value of these flows to equal the fair value of the leased asset at the inception of the lease.

Prepaid Asset

Expenses paid in advance by a company, such as insurance or rent, that are recorded as assets until they are utilized.

Unearned Interest: Leases

Interest that has been collected on a lease but not yet earned, often related to the financing element of leases.