If Investors Speculate in Derivative Contracts Rather Than in the Underlying

question 40

Multiple Choice

If investors speculate in derivative contracts rather than in the underlying asset, they will probably achieve ____ returns, and they are exposed to relatively ____ risk.

• A)lower; lower
• B)lower; higher
• C)higher; lower
• D)higher; higher

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Definitions:

Auto Theft

The criminal act of stealing or unlawfully taking possession of someone else's motor vehicle.

Self-Incrimination

Giving testimony in a trial or other legal proceeding that could expose the person testifying to criminal prosecution.

Criminal Activities

Actions that violate laws and are punishable by the government, ranging from fraud to violent offenses.

Trademarks

Symbols, names, or phrases legally registered or established by use as representing a company or product.