Two Key Features of Futures Contracts That Make Them More

question 24

Multiple Choice

Two key features of futures contracts that make them more in demand than forward contracts are:

• A) futures are traded on exchanges and must be marked to the market.
• B) futures contracts allow flexibility in delivery dates and provide a liquid market for netting positions.
• C) futures are marked to the market and allow delivery flexibility.
• D) futures are traded in liquid markets and are marked to the market.

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Definitions:

Total Cost

The aggregate amount of money spent on or required for goods or services, including direct and indirect costs.

Beginning Inventory

The worth of products ready for purchase or utilization at the beginning of a financial period.

Beginning Inventory

The worth of merchandise ready for purchase at the beginning of a financial period.

Net Operating Income

The total profit of a business after operating expenses are subtracted from gross profit.