The Advantage That Standardisation of Futures Contracts Brings Is That

question 11

Multiple Choice

The advantage that standardisation of futures contracts brings is that ________ is improved because ________.

• A)liquidity; all traders must trade a small set of identical contracts
• B)credit risk; all traders understand the risk of the contracts
• C)pricing; convergence is more likely to take place with fewer contracts
• D)trading cost; trading volume is reduced

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Definitions:

Short-Term Memory

A type of temporary memory that holds a small amount of information in an active, readily available state for a short period of time.

Long-Term Memory

A part of the memory system capable of storing large amounts of information for long periods of time.

Association

A connection or relationship between two ideas, things, events, or people, often highlighting how the existence or change in one can affect the other.

Computer Password

A secret word or phrase used to authenticate access to a computer system or software.