The Buyer of a Contract for Difference (CFD)

question 28

Multiple Choice

The buyer of a contract for difference (CFD) :

• A) is going short and expects the price to fall
• B) is going long and expects the price to rise
• C) has the right but not the obligation to buy the underlying asset in the future at a fixed price.
• D) none of the above

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Definitions:

Decrease

A reduction in quantity, size, or intensity.

Future

The indefinite time period after the present, often considered in the context of possibilities or uncertainties.

Surplus

The amount by which the quantity supplied of a product exceeds the quantity demanded at a specific price.

Excess Demand

A situation in a market where the quantity demanded of a good or service exceeds the quantity supplied at the current price.