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Finance → Corporate Finance Questions from 91 to 95

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91. The return that is forgone by investing in the project rather than investing in financial markets at the same level of risk is called
(A) internal rate of return
(B) capital saving
(C) opportunity cost
(D) opportunity saving

92. The party that agrees to buy the underlying asset in a forward contract is said to assumes
(A) forward position
(B) backward position
(C) long position
(D) short position

93. The party that agrees to sell the underlying asset in a forward contract is said to assumes
(A) forward position
(B) backward position
(C) long position
(D) short position

94. If the spot price is $1200 and the exercise price is $1000 then the payoff of a party assuming a long position is
(A) -$200
(B) $0
(C) $1
(D) $200

95. If the spot price is $1200 and the exercise price is $1000 then the payoff of a party assuming a short position is
(A) –$200
(B) $0
(C) $1
(D) $200

ANSWERS: CORPORATE FINANCE QUESTIONS
91. (C) opportunity cost
92. (C) long position
93. (D) short position
94. (D) $200
95. (A) –$200