In Comparing Futures Contracts with Options Contracts, We Can Say

question 47

Multiple Choice

In comparing futures contracts with options contracts, we can say that

• A)in a futures contract, the buyer and seller have symmetric rights, whereas in an options contract, the buyer and seller have asymmetric rights.
• B)in a futures contract, the buyer and seller have asymmetric rights, whereas in an options contract ,the buyer and seller have symmetric rights.
• C)in both futures and options contracts, the buyer and seller have symmetric rights.
• D)in both futures and options contracts, the buyer and seller have asymmetric rights.

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Definitions:

Cash Basis

An accounting method where revenues and expenses are recognized only when cash is received or paid, as opposed to the accrual basis.

Revenue Recognition

The accounting principle that governs the conditions under which revenue is recognized in the financial statements, ensuring it is recorded when earned.

Payment

It is the transfer of money or goods from one party to another as a settlement of an obligation.

Adjusted

Modified or changed in order to correct or improve the financials, often used in the context of financial statements to present a particular item in a way that reflects its true economic impact.