Why Are Most Futures Contracts Not Settled Through Delivery of the Product

question 39

Multiple Choice

Why are most futures contracts not settled through delivery of the product?

• A) Most contracts are settled through the margin account.
• B) Most contracts expire with neither party having an obligation to the other party.
• C) Most participants cancel their futures contracts through purchase of an option contract.
• D) It is easier and cheaper to settle in cash or by an offsetting futures transaction.

Understand the concept of efficiency-wage theory.

Recognize the historical significance of Henry Ford's wage policies.

Analyze the effects of wage policies on worker performance and firm efficiency.

Understand the concepts and importance of cognitive appraisal and coping strategies in managing stress.

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Definitions:

Negative Schema

Cognitive frameworks or beliefs that are pessimistic or detrimental, influencing how individuals perceive themselves and the world.

Depressing Feelings

Emotions that contribute to a state of feeling sad, hopeless, and discouraged.

Outlook on Life

An individual's general attitude or viewpoint towards life and the future.

Depressed Individuals

People who are experiencing depression, characterized by persistent feelings of sadness, hopelessness, and a lack of interest or pleasure in activities.