A Buyer of Which One of the Following Contracts Incurs

question 5

Multiple Choice

A buyer of which one of the following contracts incurs no costs until the expiration date? Ignore transaction expenses.

• A) Call option.
• B) Put option.
• C) Forward contract.
• D) Futures contract.
• E) Caption contract.

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Definitions:

Mental Set

A framework for thinking about a problem based on previous experiences and solutions, which can both aid and limit problem-solving ability.

Auto Lock

A security feature in vehicles or technology devices that automatically locks the device or vehicle after a set period of time or under certain conditions.

Confirmation Bias

The tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses.

Confirmation Bias

The inclination to seek out, interpret, prefer, and remember information in a manner that affirms one's already held beliefs or theories.