Who Benefits from a Futures Contract, a Call Contract, and a Put

question 10

Essay

Who benefits from a futures contract, a call contract, and a put contract, if prices fall?

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Definitions:

Expected Values

The mean or average outcome predicted in a probability distribution, based on the possible values it can take and their respective probabilities.

Seat Belts

Devices engineered for safety that protect passengers in a vehicle from dangerous movements caused by impacts or abrupt halts.

Chi-Squared Test

A statistical test used to examine differences between categorical variables in a contingency table, testing for independence or goodness of fit.

Nominal Variables

Variables that represent categories with no inherent order or rank among them.