One Distinguishing Difference Between the Buyer of a Futures Contract

question 70

Multiple Choice

One distinguishing difference between the buyer of a futures contract and the buyer of an option contract is that the futures buyer:

• A) pays a much higher premium than option buyers.
• B) has an obligation to purchase, not a choice.
• C) can lose no more than the initial premium.
• D)has increased rather than reduced risk.

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