One of the Biggest Differences Between a Futures Option and a Futures

question 58

Multiple Choice

One of the biggest differences between a futures option and a futures contract is that

• A) the option limits the loss exposure to the price of the option.
• B) the futures contract limits the loss exposure to the price of the contract.
• C) an option can be traded on the secondary market, whereas a futures contract cannot.
• D) a futures contract can be traded on the secondary market, whereas an option cannot.

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Definitions:

Tight Junction

Tight junctions are specialized connections between adjacent cells in animal tissue that create a barrier to prevent the leakage of substances through the space between cells.

Desmosome

A specialized cell structure that functions in cell-to-cell adhesion in animal tissues, providing mechanical strength.

Gap Junction

Structure consisting of specialized regions of the plasma membrane of two adjacent cells; contains numerous pores that allow the passage of certain small molecules and ions between them.

Anchorage Points

Specific locations or structures where forces can be applied for stability, support, or resistance, often used in construction and cellular contexts.