International Finance And Treasury - Study Mode

[#296] According to futures contract, long position states
Correct Answer

(B) purchase of future contract

Explanation

Solution: According to futures contract, long position states purchase of future contract. A futures contract is a legal agreement to buy or sell a particular commodity or asset at a predetermined price at a specified time in the future. Futures contracts are standardized for quality and quantity to facilitate trading on a futures exchange.

[#297] Type of option that gives right to buyer to sell underlying option at specific exercise price is considered as
Correct Answer

(B) put option

Explanation

Solution: Type of option that gives right to buyer to sell underlying option at specific exercise price is considered as put option. A put option is a contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security at a pre-determined price within a specified time frame.

[#298] Type of voting in which owner having half voting shares can elect board of directors is called
Correct Answer

(C) straight voting

Explanation

Solution: Type of voting in which owner having half voting shares can elect board of directors is called straight voting. Statutory voting, also known as straight voting, means that shareholders have one vote per share and that votes must be evenly divided among issues. The other shareholder voting procedure is cumulative voting, which allows votes to be weighted based on the shareholder's preference.

[#299] Speed with which prices of stocks are adjusted to unexpected news related to interest rates is called
Correct Answer

(D) market efficiency

Explanation

Solution: Speed with which prices of stocks are adjusted to unexpected news related to interest rates is called market efficiency. Market efficiency refers to the degree to which market prices reflect all available, relevant information. If markets are efficient, then all information is already incorporated into prices, and so there is no way to "beat" the market because there are no undervalued or overvalued securities available.

[#300] Form of market efficiency in which stock current prices reflects volume information and historic prices of company is classified as
Correct Answer

(A) weak form of market efficiency

Explanation

Solution: Form of market efficiency in which stock current prices reflects volume information and historic prices of company is classified as weak form of market efficiency. Weak form efficiency states that past prices, historical values and trends can't predict future prices. Weak form efficiency is an element of efficient market hypothesis. Weak form efficiency states that stock prices reflect all current information.