Which One of the Following Statements Is True Regarding Futures

question 13

Multiple Choice

Which one of the following statements is true regarding futures contracts?

• A)Futures prices are generally set equal to the spot price on the delivery date.
• B)Futures contracts generally grant the buyer the option to accept only a portion of the contract.
• C)Cost and convenience are the two key considerations when establishing the settlement procedures.
• D)The seller of a futures contract has the option to deliver cash in an amount equal to the contract value in lieu of the underlying asset.
• E)The buyer and seller of the contract negotiate the price on the maturity date.

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Definitions:

Factors

Elements or circumstances contributing to a result or situation.

Perception

The method through which people decode and structure sensory data to create a coherent understanding of the universe.

Changing Behavior

The process of modifying actions, reactions, or habits of an individual or group, often involving learning new responses to existing stimuli or conditions.

Intermittent Reinforcement Schedules

A conditioning strategy where a response is only rewarded at random intervals, playing a significant role in the persistence of behavior.