Futures Contracts Differ from Forward Contracts in That

question 1

Multiple Choice

Futures contracts differ from forward contracts in that

• A) future contracts ensures you will receive a certain amount of foreign currency at a specified future date.
• B) future contracts bind you into your end of the deal.
• C) future contracts allow you to sell your contract on an organized futures exchange.
• D) future contracts are a disadvantage if your views about the future spot exchange rate are to change.
• E) futures contracts don't allow you to realize a profit or a loss right away.

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Definitions:

Experimental Study

A research methodology that involves the manipulation of variables to observe and measure their effects on a subject group.

Need for Cognition

A personality trait that indicates the level of enjoyment a person gets from engaging in and solving challenging mental activities.

Trait Theory

A perspective in psychology that posits personality is composed of a set of stable characteristics or traits that influence individual behaviors and thoughts.

Carl Jung

A Swiss psychiatrist and psychoanalyst who founded analytical psychology, known for concepts such as the collective unconscious and archetypes.