Options,forwards and Futures All Have in Common That

question 48

Multiple Choice

Options,forwards and futures all have in common that:

• A)all have a value that is easily determined.
• B)each allows an entity to arrange for the future purchase or sale of an underlying asset at a predetermined price.
• C)all are trade in the Interbank market.
• D)each allows an entity to make an agreement and then get out of that agreement if carrying through with the agreement will result in a loss.

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Definitions:

Coffee

A brewed drink prepared from roasted coffee beans, which are the seeds of berries from the Coffea plant.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded by consumers.

Income

The financial return or earnings from employment, investments, or business ventures.

Income Effect

The change in consumption that results from a change in real income, holding prices constant.