Because Futures Are Highly Leveraged and Transactions Costs Are Less

question 14

True/False

Because futures are highly leveraged and transactions costs are less than in the cash market, market participants can alter their risk exposure to a market (stock or bond) less efficiently in the futures market.

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Definitions:

Critical-Thinking

The objective analysis and evaluation of an issue in order to form a judgment.

Interpersonal Skill

The ability to communicate or interact well with other people, crucial for effective personal and professional relationships.

Transferable Skill

A skill acquired in one context that is applicable or valuable in another context.

Leadership

The action of leading a group of people or an organization.