The Activities of Speculators Are Necessary in the Futures Markets

question 78

Multiple Choice

The activities of speculators are necessary in the futures markets in order to:

• A) prevent hedgers from trading options.
• B) provide a continual stream of profit to hedgers.
• C) help ensure futures prices are fair value.
• D) understand the direction of future price changes.

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Definitions:

Average

A statistical measure representing the central or typical value in a set of data, calculated by dividing the sum of all values by the number of values.

Scatterplot

A type of graph used in statistics to display values for typically two variables for a set of data, showing the relationship between them.

Perfect Correlation

A statistical measure indicating that two variables move in unison, either directly (1.0) or inversely (-1.0) without any deviation.

Fall

The action or process of moving downwards under the force of gravity.