Which of the Following Is True for Futures Contracts

question 1

Multiple Choice

Which of the following is true for futures contracts?

• A)They do not have standardized terms.
• B)They have clearinghouses that guarantee the transactions.
• C)They are private contracts between two parties.
• D)The parties have a higher risk of defaulting on a contract.
• E)The settlement of a futures contract occurs at the end of the contract.

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Definitions:

Promises

Declarations or assurances by one party to another agreeing to do or not to do something in the future, which may form the basis of a contract.

Land

A portion of the Earth's surface that includes its soil and anything naturally attached to it, considered as property.

Ceiling Fan

An electrically powered fan mounted to the ceiling of a room, which rotates blades to circulate air and provide cooling.

Fixture

An item that was originally a piece of personal property but becomes part of realty after it is permanently attached to the real property in question.