The Activities of Speculators Are Necessary in the Futures Markets

question 98

Multiple Choice

The activities of speculators are necessary in the futures markets in order to:

• A)Prevent hedgers from trading options
• B)Provide a continual stream of profit to hedgers
• C)Maintain futures prices at appropriate levels
• D)Understand the direction of future price changes

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Definitions:

Internal Consistency

The degree of reliability within a test—the extent to which different parts of the same test yield the same results.

Split-Half Reliability

A measure of internal consistency, often ascertained by comparing responses on odd-numbered test items with responses on even-numbered test items and seeing if the scores for these responses are correlated.

Coefficient Alpha

A method for evaluating internal consistency, calculated by averaging the intercorrelations of all the items on a given test. The higher the coefficient alpha, the higher the internal consistency.