Use the Following Statements to Answer This Question

question 22

Multiple Choice

Use the following statements to answer this question:
I.Forward contacts are more affected by credit risk than future contracts.
II.Clearinghouses improve the level of risk associated with futures transactions.

• A)I and II are correct
• B)I and II are incorrect
• C)I is correct and II is incorrect
• D)I is incorrect and II is correct

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Definitions:

Parametric Tests

Statistical tests that assume the underlying data distributions fit certain parameters, such as being normally distributed.

Errors In Assumptions

Mistakes or misjudgments made regarding the foundational conditions or premises upon which statistical analyses or models are based.

Nonparametric Techniques

Statistical methods that do not assume a specific distribution for the data and are often used for data that does not meet the assumptions necessary for parametric tests.

Population Distribution

The spread of characteristics (e.g., values or categories) within a population.