Which of the Following Statements Is Correct

question 45

Multiple Choice

Which of the following statements is correct?

• A)An option seller makes more profits than an option buyer.
• B)A futures seller makes more profits than a futures buyer.
• C)A futures buyer's profit will be equal to the futures seller's loss.
• D)Both futures buyer and seller make profit.

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Definitions:

Fallacy of Composition

The logical error of assuming that what is true for a part is necessarily true for the whole.

Economic Systems

Organizational frameworks governing the production, distribution, and consumption of goods and services in a society.

Economic Laws

Principles that govern economic activities and behaviors, asserting predictable outcomes from specific actions under certain conditions, such as supply and demand.

Average Fixed Cost

The total fixed costs of production divided by the quantity of output produced, demonstrating how fixed costs per unit change with production volume.