The Activities of Speculators Are Necessary in the Futures Markets

question 2

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:

Operating Leases

Leasing agreements for the use of assets without the intent of ownership transfer, where payments are considered operating expenses.

Time Value

A concept stating that money available now is worth more than the same amount in the future due to its potential earning capacity.

Concept

A general idea or understanding that represents a class of thoughts, objects, or phenomena within a certain framework or theory.

Debt-to-equity Ratio

A ratio measuring the balance between shareholder equity and debt in the capital structure used for financing assets.