Futures Contracts Are Similar to Forward Contracts in That They

question 26

Multiple Choice

Futures contracts are similar to forward contracts in that they both

• A) Have volatile price movements and strong interest from buyers and sellers.
• B) Give the holder the option to make a transaction in the future.
• C) Have similar liquidity.
• D) Have similar credit risk.
• E) None of the above.

---

Definitions:

Harlow (1958)

Refers to the year psychologist Harry Harlow published his seminal research on maternal-separation, dependency needs, and social isolation experiments with rhesus monkeys, highlighting the importance of caregiving and companionship.

Cloth

A flexible material made by weaving, knitting, pressing, or bonding fibers together, used for making items like clothing, drapery, or bedding.

Wire Surrogate

Reference to an experiment in developmental psychology by Harry Harlow, which showed that infant monkeys preferred a cloth-covered surrogate mother to a wire one, even when the latter provided food, highlighting the importance of comfort and security in attachment.

Attachment Formation

The process by which an emotional bond is developed between a child and a caregiver, significantly influencing the child's social and emotional development.