At Contract Maturity the Basis Should Equal ________

question 18

Multiple Choice

At contract maturity the basis should equal ________.

• A) 1
• B) 0
• C) the risk-free interest rate
• D) −1

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Definitions:

Common Stock

A type of equity security that represents ownership in a corporation, entitling holders to a share of the company's profits and voting rights.

Par Value

The face value of a bond or stock as stated by the issuer.

Paid-in Capital

Paid-in capital represents the funds raised by a company through the sale of stock to shareholders, above the par value of the shares.

Treasury Stock

Shares that were once issued and fully paid, but have been bought back by the issuing company and are held in the company’s treasury.