Why Is It Difficult to Compute the Unrealised Return on a Futures

question 25

Multiple Choice

Why is it difficult to compute the unrealised return on a futures contract?

• A) The risk-free rate may change
• B) Future dividends are unknown
• C) Futures trading requires an upfront payment that consists a fixed percentage of the total value of the security
• D) The cash outlay in a futures contract is substantially less than required for purchasing the underlying security

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