Which of the Following Is True

question 43

Multiple Choice

Which of the following is true?

• A)Forward contracts have no default risk.
• B)Futures contracts require an initial margin requirement be paid.
• C)Forward contracts are marked to market daily.
• D)Forward contract buyers and sellers do not know who the counterparty is.
• E)Futures contracts are only traded over the counter.

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Definitions:

Behavioral Economics

A field of economics that studies how psychological, cognitive, emotional, cultural, and social factors affect economic decisions of individuals and institutions.

Loss Aversion

A cognitive bias where individuals fear losses more than they value equivalent gains.

Company Retirement

Often related to the benefits or pension schemes planned for employees after they retire from a company, differing from mandatory retirement policies.

Savings Programs

Financial plans or accounts that encourage saving by offering interest or other benefits.