Which of the Following Statements Regarding Futures Contracts Is False

question 35

Multiple Choice

Which of the following statements regarding futures contracts is false?

• A) Both the buyer and the seller can get out of the contract at any time by selling it to a third party at the current market price.
• B) Futures prices are not prices that are paid today. Rather, they are prices agreed to today, to be paid in the future.
• C) Futures contracts are traded anonymously on an exchange at a publicly observed market price and are generally very illiquid.
• D) Traders are required to post collateral, called margin, when buying or selling commodities using futures contracts.

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Definitions:

Economic Swings

Periods of economic fluctuation that a country experiences, encompassing both expansions (growth) and contractions (recessions) in its economy.

Political Issues

Matters related to government, policies, and political processes that affect how a society is governed.

Economic Issues

Challenges related to the production, distribution, and consumption of goods and services within an economy.

Economic Swings

Refers to the fluctuations in economic activity over time, including periods of economic expansion and contraction.