Which of the Following Characteristics Apply to Futures Contracts

question 40

Multiple Choice

Which of the following characteristics apply to futures contracts?
I. Futures contracts are an important tool to control risk.
II. Futures contracts are highly risky and involve speculation.
III. Futures contracts specify both the quantity and the quality of the item.
IV. The buyer must hold the contract until maturity.

• A) I and II only
• B) II and IV only
• C) I, II and III only
• D) I, II, III and IV

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Definitions:

Mammal

A class of warm-blooded vertebrate animals characterized by the presence of mammary glands, which in females produce milk for feeding their young.

Unusual

Something that is not common, ordinary, or expected, often arousing interest due to its difference.

Abandon

To leave completely and finally; forsake utterly; desert.

Zamboni's Efficiency

The effectiveness of a Zamboni machine in smoothing ice surfaces, typically in ice skating rinks.