Which of the Following Statements Regarding Futures Contracts Is FALSE

question 30

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) Investors are required to post collateral, called margin, when buying or selling commodities using futures contracts.

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