Forward Contracts

question 54

Multiple Choice

Forward contracts

• A)are highly liquid.
• B)entail small information costs.
• C)provide little risk sharing.
• D)are subject to default risk.

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Definitions:

Limbic System

In vertebrates, an action system of the brain. In humans, plays a role in emotional responses, motivation, sexual behavior, autonomic responses, and biological rhythms.

Reflex Action

An automatic, involuntary response to a given stimulus that generally functions to restore homeostasis.

Motor Responses

The physiological reactions of organisms or cells to external stimuli, causing movement or action.

Sensory Signals

Electrical or chemical messages that are transmitted through the nervous system, providing information from the environment to the brain for processing.