One Difference Between Futures and Options Contracts Is

question 38

Multiple Choice

One difference between futures and options contracts is

• A)funds change hands daily in the case of options but not with futures.
• B)funds change hands daily in the case of futures, but not with options.
• C)in the case of futures funds only change hands when they are exercised.
• D)futures are designed to reduce risk while options are not.

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Definitions:

Tax Rate

The percentage at which an individual or corporation is taxed, which can vary based on income level, type of income, and jurisdiction.

Deflation

A decrease in the general price level of goods and services, often indicating an economy in decline.

Farmers

Individuals engaged in agricultural activities, aimed at producing food and other crops.

Fed

Short for the Federal Reserve System, it's the central banking system of the United States, responsible for monetary policy.