Which of the Following Statements Regarding Futures Contracts Is FALSE

question 28

Multiple Choice

Which of the following statements regarding futures contracts is FALSE?

• A)Traders are required to post collateral, called 'margin', when buying or selling commodities using futures contracts.
• B)Futures contracts are traded anonymously on an exchange at a publicly observed market price and are generally very illiquid.
• C)Futures prices are not prices that are paid today. Rather, they are prices agreed to today, to be paid in the future.
• D)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.

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Definitions:

Descent Group

A social group whose members talk about common ancestry through a line of descent that could be maternal, paternal, or both.

Patrilineal Descent

A system of lineage tracing in which an individual's family identity and inheritance are determined by the line of their father.

Patriline

A system of lineage or inheritance in which descent and inheritance rights are passed through the father's line.

Paternal Grandfather

The father of one's father, a direct male ancestor on the paternal side.