Which of the Following Explains the Difference Between Options and Futures/forward

question 52

Multiple Choice

Which of the following explains the difference between options and futures/forward contracts?

• A)An option is the right to buy or sell, whereas a futures/forward contract is an obligation to buy or sell.
• B)An option is traded in the over-the-counter market, whereas a futures/forward contract is traded on an exchange.
• C)An option has standardized contract specifications, whereas a futures/forward contract can be tailored to meet specific customer needs.
• D)An option is traded on an exchange, whereas a futures/forward contract is traded in the over-the-counter market.
• E)An option is an obligation to buy or sell, whereas a futures/forward contract is the right to buy or sell.

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Definitions:

Ultimate Question

In evolutionary biology, a term referring to the inquiry into the evolutionary reasons or purposes behind the existence of a trait or behavior.

Adaptive Value

The extent to which a trait, behavior, or characteristic increases the survival and reproductive success of an organism in its environment.

Mechanistic Causes

Explanations based on the physical and biochemical processes underlying phenomena, often used in scientific contexts to understand biological functions.

Darwinian Puzzle

A phenomenon or trait that appears to reduce the fitness of individuals, posing a question as to why it has evolved or been maintained through natural selection.