The Two Key Considerations When Determining the Delivery Mechanism for a Futures

question 36

Multiple Choice

The two key considerations when determining the delivery mechanism for a futures contract are:

• A) Location to buyer and day of delivery.
• B) Location to seller and convenience.
• C) Location to seller and day of delivery.
• D) Day of delivery and low cost.
• E) Low cost and convenience.

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Definitions:

Significant Influence

The power to participate in the financial and operating policy decisions of an investee but not control those policies.

Cost Method

An accounting method used to value an investment, based on the cost to acquire the asset, without recognizing post-purchase market changes.

Dividends

Payments made by a corporation to its shareholder members, usually derived from profits.

Management Fees

Charges levied by management for the operation of an investment fund, company, or another entity, usually calculated as a percentage of assets under management.