Financial Futures Have Become an Increasingly Attractive Investment Alternative Because

question 110

Multiple Choice

Financial futures have become an increasingly attractive investment alternative because the Chicago Board of Trade (CBOT) began trading them in 1977, and their hedging function partly accounts for the growth in trading. Which of the following statements concerning financial futures is true?

• A) Financial futures protect the investment portfolio against inflation in the economy.
• B) Investors seek protection against the increasing volatility of interest rates.
• C) Unlike commodity futures, factors that influence price shifts are not supply and demand of the commodity but buyer psychology.
• D) A reason for their popularity is that trading is restricted to government obligations, which reduces risks.
• E) A reason for their popularity is that trading is tax-free.

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Definitions:

Ritalin

A stimulant medication commonly used to treat attention deficit hyperactivity disorder (ADHD) and certain sleep disorders.

Adverse Effect

An unexpected, bad result; also known as an adverse reaction. The harm a patient experiences by a medication that has been prescribed by a health care professional and taken as instructed; an unexpected reaction to a drug taken for therapeutic purposes.

Administration Route

The path by which a drug, fluid, poison, or other substance is taken into the body, such as orally, intravenously, or topically.

Poisonous Substance

A toxic substance capable of causing illness or death if ingested, inhaled, or absorbed through the skin.