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BMGT 444 Final questions with complete solutions A+

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BMGT 444 Final questions with complete solutions A+

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BMGT 444 Final questions with complete
solutions A+

Forward contract - correct answer ✔✔agreement to buy/sell some asset to another party at
some point in the future for a fixed amount.



Long position - correct answer ✔✔party has agreed to buy the corn in the future



Short position - correct answer ✔✔Party has agreed to sell the corn in the future



futures contract - correct answer ✔✔Agreement to buy/sell an asset for a certain price at a
certain time in the future (difference: futures contract is traded on an exchange and
standardization)



Call option - correct answer ✔✔option to buy a certain asset by a certain date for a certain price
before exercise date



Put option - correct answer ✔✔Option to sell a certain asset by a certain date for a certain price
before exercise date



American option - correct answer ✔✔can be exercised at any time during its life



European option - correct answer ✔✔Can be exercised only at maturity



Option - correct answer ✔✔Gives the holder the right to buy or sell at a certain price

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