The Choice Between Futures and Options

question 8

Multiple Choice

The choice between futures and options

• A)depends on whether the underlying instrument is a debt instrument or an equity.
• B)reflects a trade-off between the higher cost of using options and the extra insurance benefits that options provide.
• C)reflects a trade-off between the higher cost of using futures and the extra insurance benefits that futures provide.
• D)reflects a trade-off between the greater risk from using options and the extra insurance benefits that options provide.

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Definitions:

Trichomycosis

A bacterial infection affecting hair shafts, primarily in humid regions, most commonly found in armpit hair.

Alopecia

A condition characterized by hair loss from the scalp or other parts of the body; can be temporary or permanent, and vary in pattern and severity.

Erythroderma

A severe and potentially life-threatening skin condition characterized by widespread redness and scaling that covers most of the body.

Xanthoderma

A condition characterized by the yellowing of the skin due to an accumulation of lipochrome pigments.