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.

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Definitions:

DC Common

A reference point in electrical circuits using direct current (DC), shared among components to return current, and ensure a common electrical potential.

Terminal 4

A specific connection or interface point, often marked as "4," within an electronic device or wiring system for securing or attaching a conductor.

PLCs

Specialized computers, known as Programmable Logic Controllers, are utilized for managing and controlling machines and processes in the industrial sector.

Relay-Type

Relay-Type control systems use electromechanical relays for switching operations in electrical circuits, offering physical isolation and power amplification.