Ag Business Unit 4 Test

Name:

What is the process by which buyers and sellers arrive at a specific price for a given lot of produce in a given location?

• a. Price determination
• b. Price point
• c. Price discovery
• d. Strike price

What is it called when participants in the commodities market take an opposite position in the futures market to that in the cash market as a means of managing price risk?

• a. Hedging
• b. Basis
• c. Price discovery
• d. Price determination

What is the difference between the local cash price and the nearby expiring futures contract?

• a. Short hedge
• b. Long hedge
• c. Strike price
• d. Basis

What are the two main categories of stock?

• a. Common and preferred
• b. Short and long
• c. Common and special
• d. Regular and preferred

SWOT stands for: Strengths, Weaknesses, Opportunities, Threats

• True
• False

What is an income statement?

• a. A financial statement summarizing assets, liabilities, and net worth as of a specific date
• b. A financial statement summarizing a business’s income and expenses for a specific period
• c. A financial statement summarizing assets, liabilities, and revenue for a specific period of time
• d. A financial statement summarizing the way cash flows in and out of a business

The components of an income statement include

• a. revenue, expenses, and net income/net loss
• b. revenue, expenses, and net worth
• c. assets, liabilities, and net worth
• d. revenue, assets, and net income

Gross revenue minus total cash expenses equals ___________________________

• a. depreciation
• b. net worth
• c. net cash income
• d. gross income

Purchasing machinery for production is a(n) ____________________ activity

• a. financing
• b. operating
• c. capital asset
• d. investment