In General, When Deciding Whether a Market Participant Needs to Buy

question 30

Multiple Choice

In general, when deciding whether a market participant needs to buy or sell futures contracts in order to hedge, the rule could be:

• A)Buy futures if you have the underlying asset and sell futures if you need the underlying asset
• B)Sell futures if you have the underlying asset and buy futures if you need the underlying asset
• C)Buy futures if you want to speculate, sell futures if you want to hedge
• D)Buy futures if you are willing to have unlimited risk, sell futures if you want capped risk

Understand federalism and the division of powers between federal and state governments.

Recognize the constitutional limitations on both state and federal powers.

Identify the roles and powers of the branches of government in the American system.

Understand the importance and application of the Necessary and Proper clause and the Spending power.

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Definitions:

Tit-for-Tat Rule

A strategy in game theory and social interactions where an individual responds to an action with a similar action, reciprocating cooperation and retaliation.

Self-Serving Bias

The tendency to attribute positive outcomes to internal factors and negative outcomes to external factors, thereby protecting self-esteem.

Ethnocentric Intergroup Attribution

The tendency to attribute positive behaviors and successes to one's own group's inherent qualities while attributing negatives to external factors.

Universal Stereotype

Stereotypes that are held widely across different cultures or societies, often based on generalized beliefs about certain groups.