Futures Contracts Minimize Default Risk by Requiring Traders to Post

question 47

Multiple Choice

Futures contracts minimize default risk by requiring traders to post collateral called ________ when buying or selling commodities using futures contracts.

• A)down payment
• B)marked to market
• C)margin
• D)commission
• E)deposit

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Definitions:

Ctenophores

Marine invertebrates known as comb jellies, characterized by their gelatinous bodies and rows of ciliary plates for movement.

Neurotransmitters

Chemical substances that transmit nerve impulses across a synapse from one neuron to another, playing a crucial role in the functioning of the nervous system.

Selfish Herds

A behavior in which individuals in a group position themselves in such a way to minimize their predation risk, benefiting from the presence of others as a shield.

Group Behavior

The behaviors and interactions that emerge from a collective of individuals within the same species, often influenced by social, environmental, and psychological factors.