Which of the Following Is Not a Difference Between Purchasing

question 77

Multiple Choice

Which of the following is not a difference between purchasing an option and purchasing a futures contract?

• A)The option requires that a premium be paid in addition to the price of the financial instrument.
• B)Owners of options can choose to let the option expire on the so-called expiration date without exercising it.
• C)The fulfillment of futures contracts is regulated by exchanges, while the fulfillment of options is not.
• D)All of the above are differences between purchasing an option and purchasing a futures contract.

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Definitions:

Bonds Payable

Long-term liabilities representing the amount a corporation owes to bondholders by a specified maturity date.

Contract Rate

The agreed-upon interest rate specified in a contractual agreement, such as a loan or bond.

Market Rate

The prevailing interest rate available in the marketplace on investments or loans.

Bonds

Financial instruments representing a loan made by an investor to a borrower, typically corporate or governmental.