The Return on a Futures Contract

question 84

Multiple Choice

The return on a futures contract

• A) is highly related to the low margin requirement.
• B) is always equal to or greater than zero.
• C) tends to be fairly stable from one trading day to the next.
• D) is solely related to the current price of the underlying item.

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Definitions:

Wins

Achievements or successes in a competition or challenge.

Income-Utility Curves

Graphical representations showing how changes in income affect an individual's level of satisfaction or utility, holding other factors constant.

Risk Preferences

Denote an individual's or entity's tolerance for risk, influencing decision-making in uncertain situations.

Expected Value

The calculated average of all possible outcomes of a random variable, weighted by their probabilities.