Which of the Following Observations Is True of Futures Contracts

question 9

Multiple Choice

Which of the following observations is true of futures contracts?

• A) Contracted through a dealer, usually a bank.
• B) Customized to meet contracting company's terms and needs.
• C) Typically no margin deposit required.
• D) Traded on an exchange and acquired through an exchange broker

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Definitions:

Expected Value

A calculation in probability theory representing the average outcome one can expect from a random event, when considering all possible outcomes and their probabilities.

Variance

A statistical measure that represents the dispersion or spread of a set of data points around their mean.

Laws of Expected Value

Theorems in probability theory that describe the behavior of the expected value of a random variable, including properties like linearity.

Probability Distribution

This function computes the likelihood of various potential outcomes of an experiment.