Futures Contracts Are the Primary Security That Insurance Companies and Banks

question 34

True/False

Futures contracts are the primary security that insurance companies and banks use to hedge interest rate risk prior to originating mortgages.

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Definitions:

ADR

Alternative Dispute Resolution; methods of resolving disputes outside of the traditional judicial process, such as arbitration or mediation.

Federal District Courts

Courts of the United States federal court system that have jurisdiction over civil and criminal cases falling under federal law or involving diverse state parties.

Med-Arb

A type of dispute resolution process in which both parties agree to start out in mediation and, if unsuccessful, to move on to arbitration.

Uniform Mediation Act

A legislative framework designed to promote consistency and establish procedures for the mediation process in legal disputes.