An Expiration Date Payoff and Profit Diagram for Forward Positions

question 82

Multiple Choice

An expiration date payoff and profit diagram for forward positions illustrates

• A) Gains and losses are usually small
• B) The payoffs to both long and short positions in the forward contract are asymmetrical around the contract price
• C) Forward contracts are zero-sum games
• D) Long positions benefit from falling prices
• E) None of the above

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Definitions:

Birth Order

Birth order refers to the chronological order of siblings' births in a family, which is often theorized to influence their personality, behavior, and psychological development.

Legal Adoptions

The process by which a legal system authorizes an individual or couple to permanently take on the parental responsibilities for a child from the child's biological or legal parents.

Relatives

Family members connected by blood, marriage, or adoption.

Stepparents

Adults who are married to a biological parent of a child and assume a parenting role to their spouse's child but are not the child's biological parents.