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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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Strike441 [17]
The answer is objective personality test.
Objective personality test is designed to measures the personality of a certain individual without being exposed to the bias of the tester.
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7 0
2 years ago
What influence tactic depends on the strength of the friendship and between the influencers and the target?
Nutka1998 [239]
Thank you for posting your question here at brainly. I hope the answer will help you. Feel free to ask more questions.
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3 0
3 years ago
Exercise 14-13 Coronado, Inc. had outstanding $5,460,000 of 11% bonds (interest payable July 31 and January 31) due in 10 years.
cupoosta [38]

Answer: Please see expalantion coumn for answer

Explanation:

1) To record issuance of bonds

Date            Account Title            Debit                        Credit

July 1        Cash                         $9,457,500

Discount on bond payable          $292,500

Bond payable                                                               $9,750,000

Calculation:

Cash  =$9,750,000 x 97% = $9,457, 500

Discount = $9, 750,000 - $9,457,500= $292,500

2)To record retirement of 11% bonds

Date            Account Title                        Debit                        Credit

August 1st     Bond payable             $5,460,000

Loss on Redemption of bonds        $218,400

Cash                                                                                            $5,569,200

Discount on Bonds payable                                                           $109,200

Calculation:

Cash =$5,460,000  x 102%  = $5,569,200

Loss on Redemption of bonds = Cash + Discount on bonds payable - Bonds payable =  $5,569,200 + $109,200) - $5,460,000=  $218,400

7 0
3 years ago
Graham, Inc.'s April bank statement shows an April 30 balance of $5,120. Prior to reconciliation, its books show a cash balance
Mars2501 [29]

Answer:

$5,570

Explanation:

The purpose of a bank reconciliation statement is to reconcile the difference between Cash Book balance and Bank Statement balance. Also it is used to check accuracy of Cash Book and the accuracy of Bank Statement.

Graham, Inc.'s April bank reconciliation statement is prepared as :

Graham, Inc.

Bank reconciliation statement as at April 30

Balance as per Bank Statement                 $5,120

Add outstanding lodgments                         $800

Add back error at the bank                            $115

Less unpresented checks                           ($465)

Balance as per Cash Book                        $5,570

therefore,

The reconciled cash balance at April 30 on the bank reconciliation should be $5,570.

4 0
2 years ago
Builtrite's upper management has been comparing their books to industry standards and came up with the following question: Why i
Vesna [10]

Answer:

Builtrite has higher than average operating expenses

Explanation:

Subtracting cost of goods sold from net sales will give you gross profit. The reason of high gross profit could be company is able to sell its products at a higher price or it is able to keep its cost of goods sold at a lower level than industry standards.

A higher-than-industry-average gross profit margin increases your chances of generating a net profit provided that you are able to keep your expenses within industry average levels.

Operating profit is the pre-tax profit or in other words it is calculated by subtracting operating expenses from the gross profit. Operating profit margin is equal to operating income divided by the total revenue. A lower operating margin despite of having higher gross profit is because the company is not able to control its operating expenses or in other words they are incurring higher operating expenses as compare to industry.

4 0
3 years ago
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