Which of the Following Is a Reason Why the Default

question 40

Multiple Choice

Which of the following is a reason why the default risk of a futures contract is assumed to be less than that of a forward contract?

• A)Forward contracts are classified as exotic derivatives.
• B)Margin requirements on futures.
• C)More flexibility as the buyer can decide whether or not to exercise the contract at maturity.
• D)None of the listed options are correct.as the default risk of a futures contract is generally considered to be higher than that of a forward contract.

---

Definitions:

Cyanosis

A bluish discoloration of the skin and mucous membranes due to insufficient oxygenation of the blood.

Labored Breathing

Breathing that requires more effort than is normal; it can be a sign of respiratory distress or underlying health issues.

Countersign

The act of adding a secondary signature to a document to verify or approve its contents, common in legal, financial, and military practices.

Telephone Order

Instructions for patient care given by a healthcare professional over the phone, often requiring subsequent written confirmation.