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Tom [10]
3 years ago
14

A share of common stock is not a derivative, but an option to buy the stock is a derivative because the value of the option is d

erived from the value of the stock. True False
Business
1 answer:
ruslelena [56]3 years ago
8 0

Answer:

True

Explanation:

Common stock such as ordinary share implies the holder has shares of ownership in a company. The holders of common stock are entitled to dividend which a share of profit of the company and the also enjoy voting rights. Common stock usually performs better than other financial investment like bonds and preferred shares and has the biggest potential for long-term gains. However, the gain usually fluctuates because will only rise if the company perform well, but the gain will fall if the performance of the company is poor. Common stocks are usually purchased through brokerages.

However, a derivative is a financial security that derives its value from an underlying asset (e.g. common stock) or group of assets (also known as a benchmark). The derivative is a contract between two or more parties and its price depends on the change in the underlying asset. Examples of underlying assets for derivatives are stocks, bonds, commodities, currencies, and among others. It is possible to buy or dell derivatives over-the-counter (OTC) or on an exchange.

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Orders placed for buying shares of a mutual fund any time up to 4:00 p.m. are priced at that day’s net asset value (NAV), and or
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Answer: Forward pricing

Explanation:

Forward pricing is a policy in the mutual funds industry where by companies that are investing are mandated to buy or sell orders based on the end net asset value for the day. It is a policy developed by SEC (Securities and Exchange Commission) supported by Rule 22(C) (1) also known as Forward pricing rule. This rule helps to lessen the severity of dilution on shareholders and also help mutual funds operations to run efficiently

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3 years ago
Ratna is preparing q presentation titled "similarities between miceo-leval and marco-lecal orientation in sociology". Which expl
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Answer:

Ratna is preparing q presentation titled "similarities between micro-level and marco-local ... - did not match any documents.

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5 0
1 year ago
Connie is analyzing the financial statements of MegaMart and Bullseye Company. She wants to invest in one of the companies and i
Annette [7]

Answer:

D. financial accounting information.

Explanation:

Financial reporting can be defined as the formal communication or disclosure of financial information and statements to present and potential users such as investors and creditors.

Financial accounting is an accounting technique used for analyzing, summarizing and reporting of financial transactions like sales costs, purchase costs, payables and receivables of an organization using standard financial guidelines such as Generally Accepted Accounting Principles (GAAP). These accounting informations are prepared and made available for investors and other external agencies. Examples of financial statements includes Balance sheet, cash-flow and income statement.

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Hence, Connie is examining the financial accounting information.

4 0
3 years ago
amanda wants to become an industrial designer. she wants to learn this special skill from an expert in the industry by working f
Vlad [161]
The answer that comes to mind would immediately be
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3 0
3 years ago
Muhammad, a 21-year old computer engineer, is opening an individual retirement account (IRA) at a bank. His goal is to accumulat
zavuch27 [327]

Answer:

The first annual depoisit will be of 3,373.49 dollars

Explanation:

Given the formula for future growing annuity

we need to solve for the yearly payment:

grow rate:  0.04

annual effective rate: 8% compounding semiannually:

(/1+0.08/2)^2-1 = r_e\\

r= 0.0816

FV 2,500,000

n 46

<em><u>Formula for future value fo an ordinary annuity:</u></em>

C_0 \times \frac{(1+r)^n-(1+g)^n}{r-g}  = FV

C_0 \times \frac{(1+0.0816)^{46}-(1+0.04)^{46}}{0.0816-0.04}  = 2,500,000\\C_0 = $3,373.4855

The first annual depoisit will be of 3,373.49 dollars

3 0
3 years ago
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