Which of the Following Statements Regarding Futures Contracts Is FALSE

question 23

Multiple Choice

Which of the following statements regarding futures contracts is FALSE?

• A)Both the buyer and the seller can get out of the contract at any time by selling it to a third party at the current market price.
• B)Futures prices are not prices that are paid today.Rather,they are prices agreed to today,to be paid in the future.
• C)Futures contracts are traded anonymously on an exchange at a publicly observed market price and are generally very illiquid.
• D)Traders are required to post collateral,called margin,when buying or selling commodities using futures contracts.

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Definitions:

Robert Owen

A 19th-century Welsh social reformer and one of the founders of utopian socialism and the cooperative movement.

Model Factory Village

A planned community designed during the Industrial Revolution to house factory workers, often including amenities and facilities intended to improve workers' living conditions and productivity.

Public Education

Education that is provided by the government to all individuals at no cost, funded by taxpayer dollars, and available to everyone within the jurisdiction.

New Harmony

Community founded in Indiana by British industrialist Robert Owen in 1825; the short-lived New Harmony Community of Equality was one of the few nineteenth-century communal experiments not based on religious ideology.