An Advantage of Futures Contracts Over FRAs Is That

question 37

Multiple Choice

An advantage of futures contracts over FRAs is that:

• A)futures contracts are not standardised
• B)futures contracts have a secondary market
• C)futures contracts have a lower up-front cost
• D)futures contracts are always deliverable
• E)futures contracts are more likely to provide a 'perfect hedge'.

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Definitions:

International Trade

The exchange of goods, services, and capital between countries or territories, contributing to global economic integration.

Investment

The act of allocating resources, usually money, with the expectation of generating an income or profit through the acquisition of assets, securities, or properties.

Late Nineteenth Century

Refers to the period from 1801 to 1900, typically highlighting global industrial, cultural, and political changes.

Democratic Countries

Nations that operate under a system of government in which power is vested in the people, who rule either directly or through freely elected representatives, emphasizing principles such as political equality, pluralism, and civil liberties.