Which of the Following Statements Is Most CORRECT

question 1

Multiple Choice

Which of the following statements is most CORRECT?

• A) One advantage of forward contracts is that they are default free.
• B) Futures contracts generally trade on an organized exchange and are marked to market daily.
• C) Goods are never delivered under forward contracts, but are almost always delivered under futures contracts.
• D) There are futures contracts for currencies but no forward contracts for currencies.

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Definitions:

Interest Rates

The cost of borrowing money or the return on investments, typically expressed as a percentage of the principal amount.

Investment

Spending on business capital, residential capital, and inventories

Short-Run Phillips

A concept in economics that illustrates an inverse relationship between the rate of unemployment and the rate of inflation over the short term.

Expansionary Monetary

Refers to a policy aimed at increasing the money supply in order to stimulate economic activity, typically adopted by a central bank to foster economic growth.