Standardization of Derivative Contracts

question 33

Multiple Choice

Standardization of derivative contracts

• A)increases their liquidity.
• B)is the rule with respect to contracts whose underlying asset is a financial security, but not for contracts whose underlying asset is a commodity.
• C)is the rule with respect to contracts whose underlying asset is a commodity, but not for contracts whose underlying asset is a financial asset.
• D)has been proposed many times by financial analysts, but has not yet been carried out by the SEC.

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Definitions:

Posttraumatic Stress Disorder

A mental health condition triggered by experiencing or witnessing a traumatic event, characterized by severe anxiety, flashbacks, and nightmares.

Increased Arousal

An increased level of awareness and physical preparedness for action, frequently linked to stress or anxiety.

Reduced Responsiveness

A decrease in the usual reaction to external stimuli, often seen in various neurological or psychological conditions.

Hypothalamic-Pituitary-Adrenal Pathway

A major part of the neuroendocrine system that controls reactions to stress and regulates many body processes, including digestion, the immune system, mood and emotions, sexuality, and energy storage and expenditure.