Which of the Following Observations Is True of Futures Contracts

question 9

Multiple Choice

Which of the following observations is true of futures contracts?

• A) Contracted through a dealer, usually a bank.
• B) Customized to meet contracting company's terms and needs.
• C) Typically no margin deposit required.
• D) Traded on an exchange and acquired through an exchange broker

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Definitions:

Net Income

The total earnings of a company after all expenses and taxes have been deducted from revenue.

Exercise Price

The specified price at which the option holder can buy (in case of a call option) or sell (in case of a put option) the underlying asset.

Stock Option Plans

Programs that grant employees the option to purchase a company's stock at a predetermined price, often used as a form of compensation.

Market Price

The current price at which an asset or service can be bought or sold in a marketplace.