An Expiration Date Payoff and Profit Diagram for Forward Positions

question 35

Multiple Choice

An expiration date payoff and profit diagram for forward positions illustrates

• A) gains and losses are usually small.
• B) the payoffs to both long and short positions in the forward contract are asymmetrical around the contract price.
• C) forward contracts are zero-sum games.
• D) long positions benefit from falling prices.
• E) short positions benefit from rising prices.

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Definitions:

Envelope Proteins

Proteins that encase some viruses, playing a crucial role in the infection process by facilitating entry into host cells.

Bacteriophages

A type of virus that infects and replicates within bacteria, often used in molecular biology research.

Cell Walls

The rigid outer layer found in plant, fungal, and certain bacterial cells, providing structural support and protection.

Restriction Enzymes

Proteins used in molecular biology that cut DNA at specific recognition nucleotide sequences, important in genetic engineering.