As Part of Futures Trading,exchanges Have Traders Place an Initial

question 67

Multiple Choice

As part of futures trading,exchanges have traders place an initial margin with its clearing house because:

• A) as the exchange has to cover its costs.
• B) as it acts like a performance bond to support the value of the futures contract.
• C) the exchange wants to ensure that brokers make profits.
• D) the exchange wants to ensure that futures contracts can be closed-out.

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Definitions:

Cystic Fibrosis

A genetic disorder that affects the lungs and digestive system, characterized by thick mucus production.

Dominant Allele

A dominant allele is a variation of a gene that will express its trait over another variant, known as the recessive allele, when present in a pair.

Recessive Allele

A variant of a gene that must be inherited from both parents to be expressed in the offspring, in contrast to a dominant allele.

Carriers

Individuals who possess one copy of a mutated gene for a recessive genetic condition but do not exhibit symptoms of the condition themselves, though they can pass the gene to offspring.