Financial Futures Have Become an Increasingly Attractive Investment Alternative Since

question 63

Multiple Choice

Financial futures have become an increasingly attractive investment alternative since the Chicago Board of Trade (CBOT) began trading them in 1977,and their hedging function partly accounts for the growth in trading.Which of the following statements concerning financial futures is true?

• A) Financial futures protect the investment portfolio against inflation in the economy.
• B) Investors seek protection against the increasing volatility of interest rates.
• C) Unlike commodity futures, factors that influence price shifts are not supply and demand of the commodity but buyer psychology.
• D) A reason for their popularity is that trading is restricted to government obligations, which reduces risks.
• E) All of the above are true statements

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Definitions:

Tremors

Involuntary, rhythmic muscle contractions and relaxations resulting in shaking movements in one or more parts of the body.

Buzzed

A state of slight intoxication, less than being drunk, typically from the consumption of alcohol.

Substance Use

The consumption of drugs or alcohol, which can vary from casual use to addiction.

Triggers

Stimuli or events that lead to a specific reaction or condition, often used in the context of mental health.