Which of the Below Statements Is FALSE

question 52

Multiple Choice

Which of the below statements is FALSE?

• A) The key role of futures contracts is that, in a well-functioning futures market, these contracts provide a more efficient means for investors to alter their risk exposure to an asset.
• B) A futures market will be the price discovery market when market participants prefer to use this market rather than the cash market to change their risk exposure to an asset.
• C) The futures market and the cash market for an asset are drawn apart by an arbitrage process.
• D) The argument that futures markets destabilize the prices of the underlying financial assets is an empirical question, but greater price volatility by itself is not an undesirable attribute of a financial market.

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Definitions:

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A state in which an individual lacks a sense of social belonging, true engagement with others, and fulfilling relationships.

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