When the Seller of a Futures Contract Is Granted a Choice

question 80

Multiple Choice

When the seller of a futures contract is granted a choice among various assets to deliver, the seller is said to have which one of the following options?

• A)right-to-choose option
• B)spot or futures option
• C)cheapest-to-deliver option
• D)mark-to-market option
• E)flexible delivery option

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Definitions:

Marginal Revenue

The additional income received from selling one more unit of a good or service.

Monopolistic Competitor

A market structure where many firms sell products that are similar but not identical, allowing them for some degree of market power.

Product Promotion

The process of marketing and advertising a product to increase awareness and sales.

Marginal Revenue

The increase in revenue resulting from the sale of one additional unit of a product or service.