The Use of Leverage Is Practiced in the Futures Markets

question 56

Multiple Choice

The use of leverage is practiced in the futures markets due to the existence of ________.

• A) banks
• B) brokers
• C) clearinghouses
• D) margin

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Definitions:

Unit Product Cost

The total cost associated with manufacturing one unit of a product, including both fixed and variable costs.

Absorption Costing

A costing method that includes all manufacturing costs, both fixed and variable, in the cost of a product.

Cost Of Goods Sold

The total cost incurred by a company to manufacture, acquire, and sell its products, including materials and labor costs.

Absorption Costing

Absorption costing is a method of inventory costing in which all variable and fixed manufacturing costs are included in the cost of a unit of product, distinguishing it from variable costing.