Futures Differ from Forward Contracts Because

question 63

Multiple Choice

Futures differ from forward contracts because

• A) Futures have more liquidity risk.
• B) Futures have more credit risk.
• C) Futures have more maturity risk.
• D) All of the above
• E) None of the above

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Definitions:

Burden

In an economic context, this refers to the impact of a tax or other financial obligation on the parties involved, often measured in terms of how it affects their wealth or consumption.

Demand Function

A mathematical representation showing the relationship between the quantity demanded of a good and its price, along with other factors like income and prices of related goods.

Supply Function

A mathematical representation that shows the relationship between the quantity of a good supplied and its price.

Subsidy

A subsidy is a financial contribution provided by government or another authority to support businesses, markets, or individuals, aiming to promote economic and social policies.