Question $4\mathrm{.}4$

$($Total: $16$ marks$)$

In the table below, choose the financial instrument to list on the left side that best explains the example on the right side. Types of financial instrument to select from: financial asset, financial liability, equity, compound instrument, basic option, swap, forward, future, warrant, put option, or call option.

$\backslash$begin$\{$tabular$\}\{|$l$|$l$|\}$

$\backslash$hline $\backslash$begin$\{$tabular$\}\{$l$\}$

Type of financial $\backslash \backslash$

instrument

$\backslash$end$\{$tabular$\}$ & Example $\backslash \backslash$

$\backslash$hline & $\backslash$begin$\{$tabular$\}\{$l$\}$

A company contracts with an investment bank to pay the bank prime rate $\backslash (+1\backslash \%\backslash )$ interest on $\backslash \backslash$

$\backslash (\backslash$$ $25\backslash )$ million of debt in exchange for receiving $5\backslash \%$ from the bank.

$\backslash$end$\{$tabular$\}\backslash \backslash$

$\backslash$hline & $\backslash$begin$\{$tabular$\}\{$l$\}$

Company Abacus issues $\backslash (\backslash$$ $10\backslash )$ million debentures with warrants to purchase shares for $\backslash \backslash$

$\backslash (\backslash$$ $10/\backslash )$ share within $8$ years.

$\backslash$end$\{$tabular$\}\backslash \backslash$

$\backslash$hline & $\backslash$begin$\{$tabular$\}\{$l$\}$

A company contracts to sell $100$ barrels of oil at $\backslash (\backslash$$ $110/\backslash )$ barrel in March on the Chicago $\backslash \backslash$

Mercantile Exchange.

$\backslash$end$\{$tabular$\}\backslash \backslash$

$\backslash$hline & Note payable $\backslash \backslash$

$\backslash$hline & $\backslash$begin$\{$tabular$\}\{$l$\}$

A company purchases the right but not the obligation to purchase $5,000$ shares in another $\backslash \backslash$

company at $\backslash (\backslash$$ $15\backslash )$ each over a $12-$year period.

$\backslash$end$\{$tabular$\}\backslash \backslash$

$\backslash$hline & $\backslash$begin$\{$tabular$\}\{$l$\}$

Company X contracts to buy $1,000$ oz of silver at $\backslash (\backslash$$ $40/$ o z $\backslash )$ on March $15,2025,$ from $\backslash \backslash$

Company Y$.$

$\backslash$end$\{$tabular$\}\backslash \backslash$

$\backslash$hline & Note receivable $\backslash \backslash$

$\backslash$hline & $\backslash$begin$\{$tabular$\}\{$l$\}$

A company purchases the right but not the obligation to purchase U$.$S$.$ dollars for $\backslash \backslash$

CAD$\backslash$$$1\mathrm{.}08/$US$\backslash$$ within a $30-$month period.

$\backslash$end$\{$tabular$\}\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$