The purpose of derivatives is to:
A. postpone the risk for both parties in the transaction.
B. transfer the risk from one person to another.
C. increase the risk so the return is larger.
D. eliminate risk for both parties in the transaction.
Answer: B
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Indicate whether the statement is true or false
Which of the following probably has the shortest long run?
a. a law firm b. a steel mill c. an automobile plant d. a tire factory e. an aircraft engine factory
Without contracts, what type of transactions would occur?
A) forward purchases. B) lateral purchases. C) spot transactions. D) side bars.
Which of the following is not a component of M1 money supply?
a. Currency b. Traveler's checks c. Savings accounts d. Demand deposits