Options on Futures Contracts Are Very Popular Because

question 59

Multiple Choice

Options on futures contracts are very popular because

• A) They require the holder to purchase at a future date
• B) Of their ability to create leverage
• C) The seller of the futures contract is under no obligation
• D) The amount of the underlying commodity is negotiable
• E) None of the above

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Definitions:

Operating Income

The income generated from the primary activities of a business, determined by deducting operating costs from the gross profit.

Selling Price

The amount a buyer pays to purchase a product or service from a seller.

Variable Cost

A cost that varies with the level of output or production, such as materials and labor directly involved in manufacturing.

Fixed Costs

Expenses that do not change with the level of goods or services produced by a business, such as rent or a salaried employee's wages.