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Which of the Following Types of Financial Instruments Is a Contract

question 35

Multiple Choice

Which of the following types of financial instruments is a contract between a buyer and a seller in which the buyer has the right (but not the obligation) to buy an agreed quantity of a specified commodity or financial instrument at a certain time for a certain price.


Definitions:

Par Value

A nominal value assigned to a security or share, representing its minimum stated value.

Common Stock

A type of equity security that represents ownership in a corporation, with voting rights and potential dividends.

Market Price

The prevailing rate at which a service or asset is offered for sale or purchase in a market.

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, reflecting wear and tear or obsolescence.

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