In the Event of a Default on One Side of a Futures

question 4

Multiple Choice

In the event of a default on one side of a futures trade,

• A)the clearing member stands in for the defaulting party.
• B)the clearing member will seek restitution for the defaulting party.
• C)if the default is on the short side, a randomly selected long contract will not get paid. That party will then have standing to initiate a civil suit against the defaulting short.
• D)both a and b

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Definitions:

Average Ages

The mean age of a group of individuals, calculated by summing their ages and dividing by the number of individuals.

Standard Deviation

A measure that quantifies the amount of variation or dispersion of a set of data values from the mean value of the dataset.

Sample

A subset of individuals or observations from a larger population, used to make inferences about the population.

Population Mean

The average of all the values in a population, representing the central tendency of the dataset.