Which of the Following Statements Best Describes the Relationship Between

question 81

Multiple Choice

Which of the following statements best describes the relationship between options and futures?

• A)Futures limit both gains and losses, while options limit losses without limiting gains.
• B)Options limit both gains and losses, while futures limit losses without limiting gains.
• C)Futures contracts may be purchased on options contracts, but options cannot be bought on futures contracts.
• D)Buyers of futures contracts must pay a futures premium, whereas buyers of options do not have to pay a premium.

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Definitions:

Video Games

Electronic games that involve interaction with a user interface to generate visual feedback on a two- or three-dimensional video display device.

E-books

E-books are digital versions of books, made available on electronic devices, allowing for easy access and portability.

Substitutes

Products or services that can be used in place of each other, where an increase in the price of one leads to an increase in the demand for the other.

Optimal Consumption

The mix of consumer purchases that maximizes the utility or satisfaction obtained from a given expenditure level.