A contract requiring a specified future monetary payment at a specified future point in time in exchange for the delivery of a specific asset is called a: * A. nonconvertible option. B. hedge. C. long contract. D. swap.
A contract requiring a specified future monetary payment at a specified future point in time in exchange for the delivery of a specific asset is called a: * A. nonconvertible option. B. hedge. C. long contract. D. swap.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A contract requiring a specified future monetary payment at a specified future point in time in exchange for the delivery of a specific asset is called a: *
A. nonconvertible option.
B. hedge.
C. long contract.
D. swap.
Expert Solution
Step 1: Introduction:
A derivative is a complicated financial security that is agreed upon by two or more parties. Traders utilize derivatives to trade various assets and gain access to certain marketplaces. Stocks, bonds, commodities, currencies, interest rates, and market indexes are the most popular underlying assets for derivatives. Changes in the underlying asset's price determine the contract's value.
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