Which of the Following Statements Is True

question 13

Multiple Choice

Which of the following statements is true?

• A)The advantage of using forwards for creating a synthetic fixed rate position is that there are no cash flows until the contract matures.
• B)The advantage of using futures for creating a synthetic fixed rate position is that futures contracts are standardised.
• C)The advantage of using forwards for creating a synthetic fixed rate position is that futures contracts are standardised.
• D)The advantage of using futures for creating a synthetic fixed rate position is that there are no cash flows until the contract matures.

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Definitions:

Inequality

A mathematical statement that indicates the relationship of less than (<), greater than (>), less than or equal to (≤), or greater than or equal to (≥) between two expressions.

Critical Numbers

Values in the domain of a function where its derivative is zero or undefined, often marking potential maxima, minima, or inflection points.

Real Number Line

A visual representation of all real numbers arranged in order of value on a straight, horizontal line.

Inequality

A mathematical statement that shows the relationship between quantities that are not necessarily equal, using symbols like <, >, ≤, and ≥.