Which of the Following Statements Is True

question 55

Multiple Choice

Which of the following statements is true?

• A)The default risk in futures contracts is considered to be less than that of forward contracts because of daily marking to market of futures.
• B)The default risk in futures contracts is considered to be less than that of forward contracts because of margin requirements on futures that act as a security bond and because of default guarantees by the future exchange itself.
• C)The default risk in futures contracts is considered to be less than that of forward contracts because of price limits that spread out over times of extreme price fluctuations.
• D)All of the listed options are correct.

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Definitions:

Furuncle

A painful, pus-filled bump under the skin caused by infected hair follicles, commonly known as a boil.

Boil

A painful, pus-filled bump under the skin caused by infected, inflamed hair follicles.

Papule

A small, raised, solid pimple or swelling on the skin, often forming part of a rash.

Flat Lesion

A skin change that is level with the surrounding skin and cannot be felt; it is observed rather than felt.