There Are Three Reasons Why Futures Options on Fixed-Income Securities

question 51

Essay

There are three reasons why futures options on fixed-income securities have largely supplanted options on physicals as the options vehicle used by institutional investors. Describe two of these three reasons.

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Definitions:

National Public Radio

A non-profit media organization that serves as a national syndicator to a network of public radio stations in the United States.

Allocation of Resources

The process by which resources are distributed for the production of goods and services within an economy.

Government Intervention

Regulatory actions taken by a government in order to affect decisions made by individuals, groups, or organizations within its economic systems.

Excludable

A characteristic of a good or service that allows the owner or provider to prevent others from using it without permission.