141. Techniques of costing: (a) marginal costing (b) direct costing
(c)absorption costing (d) uniform costing.
142. Standard costing:
standard costing is a system under which the cost of the product is determined
in advance on certain predetermined standards.
143. Marginal costing: it is
a technique of costing in which allocation of expenditure to production is
restricted to those expenses which arise as a result of production, i.e.,
materials, labour, direct expenses and variable overheads.
144. Derivative:
derivative is product whose value is derived from the value of one or more basic variables of underlying
asset.
145. Forwards: a
forward contract is customized contracts between two entities were settlement
takes place on a specific date in the future at today’s pre agreed price.
146. Futures: a
future contract is an agreement between two parties to buy or sell an asset at
a certain time in the future at a certain price. Future contracts are standardized exchange
traded contracts.
147. Options: an
option gives the holder of the option the right to do some thing. The option
holder option may exercise or not.
148. Call option: a
call option gives the holder the right but not the obligation to buy an asset
by a certain date for a certain price.
149. Put option: a put
option gives the holder the right but not obligation to sell an asset by a
certain date for a certain price.
150. Option price:
option price is the price which the option buyer pays to the option seller. It
is also referred to as the option premium.
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