Investing in Futures Contracts

question 120

Multiple Choice

Investing in futures contracts

• A) Is the only means of investing in tangible assets
• B) Can be very risky
• C) Is a means of locking in a pre-determined amount of profit
• D) Is a method used to avoid losses
• E) All of the above

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Definitions:

Cash Flow

The total financial movement entering and exiting a business, substantially affecting its operational liquidity.

Present Value

The current value of a future amount of money or a series of future payments, discounted at a specific rate.

Future Value

The value of an asset or cash at a specific date in the future that is equivalent in value to a specified sum today.

Precedent

A legal decision or form of proceeding serving as an authoritative rule or pattern in future similar or analogous cases.