If Investors Speculate in Derivative Contracts Rather Than the Underlying

question 61

Multiple Choice

If investors speculate in derivative contracts rather than the underlying asset, they will probably achieve ____ returns, and they are exposed to relatively ____ risk.

• A)lower; lower
• B)lower; higher
• C)higher; lower
• D)higher; higher

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Definitions:

Homogenous

Characterized by similarity or uniformity in structure, composition, or nature.

Cultural Context

Refers to the environment and social factors that influence the values, practices, and behaviors of individuals and communities.

Environmental Context

The surrounding conditions, including physical, social, and cultural factors, that influence an individual's or community's behavior and development.

Discipline

The practice of training individuals to obey rules or a code of behavior, using punishment to correct disobedience.