Which of the Following Contributes to the Liquidity of Financial

question 3

Multiple Choice

Which of the following contributes to the liquidity of financial futures and their price discovery function?

• A)Their use by speculators.
• B)The use of standardised contracts.
• C)The low cost of trading.
• D)The limited number of settlement dates.
• E)All of these.

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Definitions:

Depreciation Cost

The systematic allocation of an asset's cost over its useful life to reflect the loss in value over time.

Plant Asset

Long-term tangible assets that are used in the production of goods and services, including machinery, buildings, and equipment.

Depreciable Cost

The total amount that can be depreciated over the life of an asset, typically the asset's cost minus its salvage value.

Salvage Value

The foreseen redemption value of an asset after its period of usability concludes.