Match Each of the Following Terms with Their Correct Description

question 140

Multiple Choice

Match each of the following terms with their correct description from the items listed below.* Each term may be used more than once, and it is possible that one or more of the classifications may not be used at all.
-Assumes that all future cash inflows earn the minimum rate of return

• A)Payback period
• B)Accounting rate of return
• C)Net present value
• D)Internal rate of return
• E)Discount rate
• F)Annuity
• G)Postaudit
• H)Compounding of interest
• I)CCA Tax Shield
• J)Future Value
• K)Discounted cash flows

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Definitions:

Arbitrage Profit

The profit made from buying and selling identical assets in different markets or formats to take advantage of differing prices for the same asset.

Buying

The action of acquiring ownership in a security or other financial asset in the hope of generating a gain.

Selling

The process of parting with goods or services in exchange for money or other compensation.

Hedge Strategy

Investment strategies intended to reduce potential losses that may be incurred from adverse price movements in assets.