37. A car loan offered by a bank is a derivative security.1 [' b6 r5 m' R3 \
A.True B.False
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38. Options give buyers the obligation to buy or sell an asset at a present price over a specific period.
' p* @. W4 V8 o# \6 j m5 WA.True B.False
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39. Futures contracts usually end in the delivery of the underlying commodity.
) _" k. \& O; B5 F6 J* t7 e! `A.True B.False 4 D! G; k& C9 S
2 }1 ~: ^ S6 {( X40. The forward exchange rate is the current spot rate adjusted for the interest rate differentials.
$ q$ Q M- @; d4 R6 F8 T& u, ~" S# T; {A.True B.False + h9 \; b% _: u" w# T
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41. Dirty price is the bond price excluding accrued interest, i.e., the price paid by the bond buyer.
$ e/ b9 j6 P6 c# u* mA.True B.False
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4 s9 i, E: j/ K5 t2 `42. Every transaction must produce a debit and credit entry of the same financial amount.
. O/ d" w1 I2 o) N+ lA.True B.False N9 D. L% ~) z- H/ G
/ f! n5 H" A; v4 a v43. There are three parties to a life policy in addition to the issuing company: the insurer, the life assured and the beneficiary.& W$ l( W: @8 p7 S. p& h+ e
A.True B.False ( F& E2 r2 q9 _6 G/ H
; ?3 T/ n, Y2 w- j44. A guarantee is an agreement that may be evidenced in writing or in oral form.
' R3 l' u# n& M8 e( \+ a, L, YA.True B.False
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45. An insurable interest is assumed where people take life assurance on their own lives or where the relationship is that of husband and wife.
9 F: I$ l$ L1 T' F( l8 UA.True B.False 6 b; }" t* h% r( d
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46. Profit does not equal cash and some profitable businesses have failed for want of cash.7 b* n: ^1 Z9 Y9 e2 @
A.True B.False & P+ T6 u9 Q; s5 F* k+ d* N5 J
. j( z9 k- [" K/ Z0 J9 S9 r47. Bills are negotiated with recourse to customers in the event of nonpayment.
y) B1 Z8 Y: h2 fA.True B.False 8 d* ]+ x* F& E" S
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48. A firm‘s gearing is the level of fixed assets as a percentage of total assets.2 T3 ?+ G6 a# Z8 I2 m; J
A.True B.False
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49. A bank must obtain a judgment if it wishes to pursue its legal remedies against a debtor. . W. ?" |$ E% u @7 r' Q' m
A.True B.False ' y% ]7 C* p! ?/ J
" t5 v( g. k4 @3 N# w50. When a country borrows from abroad, its balance of international payments shows an outflow of foreign exchange.& z" W; T5 {' |8 y
A.True B.False |