The Buyer of a Futures Contract

question 157

Multiple Choice

The buyer of a futures contract:

• A)agrees to pay the seller based on the future price of some asset.
• B)assumes the risk of the future price of some asset.
• C)must pay a set amount to the seller regardless of what the future price turns out to be.
• D)All of these are true.

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Definitions:

Phrenology

An outdated and discredited theory that the shape and contours of the skull could determine a person’s personality traits and mental abilities.

Relative Power

A concept describing the amount of influence or control one entity has in comparison to another within a particular context or relationship.

Skull

The bony structure in the head, containing the brain and supporting the facial structure.

Bumps And Indentations

Physical features characterized by raised or lowered areas on a surface, often felt through touch.