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Financing Options for Larger Purchases - Essay Example
Author : olsonjalon
Finance & Accounting
Pages 4 (1004 words)
Financing options for larger purchases Financing options for large purchases The financing option is a source from where one can seek some financial help for his/her upcoming future or possible need for some finance…
It is like a contract between two parties written for engaging in a transaction. The selling party must fulfill all the obligations written in the contract for the transaction while the buyers must also engage themselves in the particular transaction. Different financing options have different prices depending upon the value of the asset which is to be bought or sold. Usually the values of asset are currency or bonds or it may be future contracts along with a premium package till the expiry of the contract. When the option is exercised within due time, the other party collects its premium from the buyer & deliver the asset to the buyer. If the option is not fulfilled into the due time of expiry, the contract is considered void. There are such types of options too in which the actual buyer of an asset sell it to someone else, this is known as the exchange of option. Usually, all kinds of financial options are provided by finance corporations or by investment banks. Whenever there is a contract held between two parties considering any of the financial options, the terms of the option are required to write down. It must always mention the quantity & type of asset to be purchased & at what value it is going to be sold out. The expiry date is also mentioned in the contract & also some other terms & conditions upon which the whole contract is written, like the premium amount, the interest rate etc. ...
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