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

question 5

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)the clearing member stands in for the defaulting party and will seek restitution for the defaulting party.

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Definitions:

Advanced Moral Reasoning

Advanced moral reasoning is a level of ethical thinking that goes beyond personal or cultural norms to consider the greater good and principles of justice, fairness, and human rights.

Preconventional

A stage in moral development where individuals' moral reasoning is based primarily on consequences and personal benefits.

Sociological Criticism

An approach in critical theory that analyzes literature, media, or art from a sociological perspective, focusing on cultural, economic, and political contexts.

Cognitive Development

The study and observation of how intelligence, reasoning, language development, and information processing evolve from childhood through adulthood.