Stock Specialists and OTC Dealers Hedge Their Positions with Stock

question 6

Multiple Choice

Stock specialists and OTC dealers hedge their positions with stock index futures:

• A)to profit from major market movements.
• B)to reduce market risk on his or her inventory.
• C)to reduce the unsystematic risk on the stocks in his or her inventory.
• D)More than one of the above

Be aware of the legal remedies available to parties when a contract is breached by one of the parties or when a third party beneficiary's rights are violated.

Understand the impact of statutory restrictions on the assignment of certain benefits like workers' compensation.

Grasp the rule of priority in assignments and its practical implications.

Recognize the role of consent in contract assignments and delegations and its impact on the parties' rights.

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Definitions:

Components in Parallel

Parts of a system designed to operate simultaneously, ensuring that if one part fails, the system as a whole can still function.

System Reliability

The probability that a system or component will perform its required functions without failure under stated conditions for a specified period of time.

Components in Series

A configuration where components are connected end-to-end in such a way that the failure of one component results in the failure of the entire system.

System Reliability

The probability that a system, including all individual components and processes, will perform its required functions without failure under stated conditions for a specified period of time.