Explain Why Some Futures Contracts Are Settled in Cash While

question 69

Essay

Explain why some futures contracts are settled in cash while others are not.Provide an example of each.

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Definitions:

50% Interest

A financial or ownership stake in an entity or asset, where the holder owns or is entitled to one-half of the interest in the subject matter.

Equity Method

An accounting technique used to record investments in other companies, where the investment is significant but does not grant control over the company.

Significant Influence

The ability to affect the financial and operating policies of another entity through ownership, contract, or other means, without having full control or ownership.

Other Revenue

Income a business earns from activities not related to its primary operations, such as rental income or interest earned.