Which One of the Following Is Not Correct Concerning Futures

question 18

Multiple Choice

Which one of the following is not correct concerning futures contracts?

• A) Futures contracts entail an obligation rather than an option.
• B) The contract price is set at the beginning of the contract.
• C) The contracts are exchange-traded.
• D)All gains or losses are recorded at contract expiration.

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Definitions:

Investment Account

An account held at a financial institution or brokerage that is used by investors to hold and manage securities, such as stocks, bonds, mutual funds, and other investment products.

Acquisition of Additional Shares

The purchase of more shares in a company, either to increase an existing stake or as a strategic move in corporate acquisitions.

Dividends

Payments made by a corporation to its shareholder members, usually derived from the company's profits.

Consolidated Statement of Cash Flows

A financial statement that shows the cash inflows and outflows of a parent company and its subsidiaries, revealing how cash is generated and used over a period.