The Choice Between Futures and Options

question 8

Multiple Choice

The choice between futures and options

• A)depends on whether the underlying instrument is a debt instrument or an equity.
• B)reflects a trade-off between the higher cost of using options and the extra insurance benefits that options provide.
• C)reflects a trade-off between the higher cost of using futures and the extra insurance benefits that futures provide.
• D)reflects a trade-off between the greater risk from using options and the extra insurance benefits that options provide.

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Definitions:

Organizational Buying Behavior

The decision-making process and actions of organizations in acquiring goods and services to achieve their goals.

Technical Assistance

Support provided to individuals or organizations in the form of expertise, skills, or knowledge to resolve technical issues.

Delivery Time

The duration it takes for a product or service to be transported from the seller to the recipient after an order has been placed.

Organizational Buying Process

The sequence of steps a business follows when making a purchase decision, including the identification of needs, evaluation of options, and final selection.