Which of the Below Statements Is FALSE

question 33

Multiple Choice

Which of the below statements is FALSE?

• A) While the degree of leverage available in the futures market varies from contract to contract, as the initial margin requirement varies, the leverage attainable is considerably greater than in the cash market.
• B) Futures markets can be used to reduce price risk.
• C) The exchange does not have the right to impose a limit on the daily price movement of a futures contract from the previous day's closing price.
• D) The rationale offered for the imposition of daily price limits is that they provide stability to the market at times when new information may cause the futures price to exhibit extreme fluctuations.

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Definitions:

Durable Power

Refers to a durable power of attorney, a legal document that grants someone the authority to act on another's behalf, even if the grantor becomes incapacitated.

Medical Decisions

The process of making choices related to health care by patients, often involving considerations of various treatment options.

Executed

A term applied to a contract whose terms have all been fully performed.

Implied Trust

A trust created by a court when (1) an express trust fails and the court can imply the existence of a trust from certain behavior or (2) the law steps in to protect someone from fraud or other wrongdoing.