BEC- Fin Mngmt

Question 1

Financial Structure

Answer 1

Accounting structure A=L +OE
Includes current and long term items

Question 2

Capital Structure

Answer 2

Non current items & Owner’s equity

Question 3

Annual percentage rate (APR)

Answer 3

APR = [(Discount Lost / Principal) × 1] / Time Fraction of Year

Question 4

The seller of a forward contract will lose when

Answer 4

The seller of a forward contract will lose when the price increases because the seller has agreed to sell at a lower price than the price of the asset after the price increase. Also, obviously, if the buyer gains, the seller must lose.

Question 5

futures contract

Answer 5

A futures contract obligates the contract holder to either buy or sell a specified asset at a specific price at a specified date.

futures contracts are executed on an exchange and require the holder to purchase or sell a specific quantity of an asset on a specific future date.

Question 6

forward contract

Answer 6

A forward contract obligates the contract holder to either buy or sell a specified asset at a specific price at a specified date.