The Choice Between Futures and Options

question 8

Multiple Choice

The choice between futures and options

• A)depends on whether the underlying instrument is a debt instrument or an equity.
• B)reflects a trade-off between the higher cost of using options and the extra insurance benefits that options provide.
• C)reflects a trade-off between the higher cost of using futures and the extra insurance benefits that futures provide.
• D)reflects a trade-off between the greater risk from using options and the extra insurance benefits that options provide.

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Definitions:

Skilled Workers

Individuals who have received specialized training, education, or experience that allows them to perform specific tasks or jobs.

Global Economy

The interconnected marketplace where goods, services, and labor are exchanged across worldwide platforms, transcending national borders.

Low-Cost Labor

Employment that is compensated at a low wage rate, often within industries or regions where labor rights are minimal or not rigorously enforced.

Capitalism

An economic system characterized by private or corporate ownership of goods and services, where production and consumption are driven by market forces and profit motive.