The Main Advantage of Using Options on Futures Contracts Rather

question 88

Multiple Choice

The main advantage of using options on futures contracts rather than the futures contracts themselves is that interest-rate risk is

• A) controlled while preserving the possibility of gains.
• B) controlled while removing the possibility of losses.
• C) not controlled but the possibility of gains is preserved.
• D) not controlled but the possibility of gains is lost.

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Definitions:

Uranium-235

An isotope of uranium that is fissile, meaning it can sustain a nuclear chain reaction, used as fuel in nuclear reactors and weapons.

Conservation of Matter

A scientific law stating that matter cannot be created or destroyed in an isolated system, only transformed.

Pollution

The introduction of contaminants into the natural environment that causes adverse change, affecting air, water, and land quality.

Industrial Heat

Refers to the thermal energy generated and used in industrial processes, often involving the production and manufacturing sectors.