One Difference Between Futures and Options Contracts Is

question 38

Multiple Choice

One difference between futures and options contracts is

• A)funds change hands daily in the case of options but not with futures.
• B)funds change hands daily in the case of futures, but not with options.
• C)in the case of futures funds only change hands when they are exercised.
• D)futures are designed to reduce risk while options are not.

---

Definitions:

Factory Machine Hours

A measure of production time, indicating the total hours that machinery is operated in the manufacturing process.

Power Costs

The expenses incurred by a company for the electricity or energy used in its operations.

Sales Price

The amount of money for which a product or service is sold to the customer.

Contribution Margin

The amount by which sales revenue exceeds variable costs, contributing to covering fixed costs and profit generation.