In the Futures Markets,profits from Speculation Primarily Arise Because of The

question 24

Multiple Choice

In the futures markets,profits from speculation primarily arise because of the:

• A) spread between the bid and ask prices on bonds.
• B) illiquidity of markets for derivative securities.
• C) high information costs in markets for derivative instruments.
• D) difference in expectations among market participants about future prices of a commodity or financial asset.

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Definitions:

Marginal Benefit

The boost in enjoyment or value obtained when one more unit of a product or service is consumed or produced.

Economic Theory

A conceptual framework that explains economic processes, behaviors, and the interaction of economic agents, based on assumptions and predictions.

Illegal Immigrants

Individuals who enter or reside in a country without the proper authorization or documentation from the government.

Legal Residents

Individuals who have been granted the right to live permanently in a country other than their own, through a legal process.