Two Key Features of Futures Contracts That Make Them More

question 22

Multiple Choice

Two key features of futures contracts that make them more in demand than forward contracts are:

• A) futures are traded on exchanges and must be marked to the market.
• B) futures contracts allow flexibility in delivery dates and provide a liquid market for netting positions.
• C) futures are marked to the market and allow delivery flexibility.
• D) futures are traded in liquid markets and are marked to the market.
• E) All of

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Definitions:

Confidence Interval

A set of numbers, taken from sample-based statistics, that is probable to contain the estimated value of an unspecified population parameter.

Population Standard Deviation

A measure of the spread or dispersion of a set of data points in a population.

Sampling Error

The discrepancy between a sample statistic and the actual population parameter, which arises purely by chance from random sampling.

Confidence Interval

A variety of numerical values, sourced from sample measurements, that is believed to include the value of a not-yet-known population attribute.