A Thin Market Usually Does Not Allow the Use of Futures

question 26

True/False

A thin market usually does not allow the use of futures contracts or other hedging tools.

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Definitions:

Financial Capital

Refers to the funds provided by lenders (and investors) to businesses to purchase real capital.

Machinery

Equipment and devices that perform specific tasks in industries, contributing to production processes.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, representing the financial gain in conducting business activities.

Rate of Return

The increase or decrease in the value of an investment over a set time frame, shown as a percent of the investment's original price.