The Dollar Value of the Outstanding Futures Position Depends on The

question 49

Multiple Choice

The dollar value of the outstanding futures position depends on the:

• A)number of contracts bought and sold and the price of each contract
• B)cash exposure ratio
• C)number of contracts bought and sold and the change in interest rates
• D)contracts that should be sold per dollar of cash exposure

---

Definitions:

Satisficing

A decision-making strategy that entails choosing an option that meets a minimum level of satisfaction, rather than the optimal solution, due to constraints such as limited information or time.

Prospect Theory

A behavioral economic theory that describes how people make decisions between alternatives that involve risk, where the potential for losses influences choices more than equivalent gains.

Closing Costs

Fees and expenses, over and above the price of the property, incurred by buyers and sellers in transferring ownership of a property.

Escalation of Commitment

The tendency to continue to invest in a decision despite evidence of it being wrong, often leading to increased commitment based on already invested resources.