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

---

Definitions:

Customer Service

The support companies offer to their customers before, during, and after purchasing or using their products or services.

Exclusive Distribution

Distribution strategy involving limited market coverage by a single retailer or wholesaler in a specific geographical territory.

Luxury Automobiles

High-end vehicles that offer superior comfort, performance, and amenities, often characterized by their higher price points and status symbol.

Franchised Specialty Goods

Retail products sold through outlets operating under a franchise agreement, often focusing on a niche market.