Margin in a Futures Transaction Differs from Margin in a Stock

question 55

Multiple Choice

Margin in a futures transaction differs from margin in a stock transaction because

• A) stock transactions are much smaller
• B) delivery occurs immediately in a stock transaction
• C) no money is borrowed in a futures transaction
• D) futures are much more volatile
• E) none of the above

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Definitions:

Inseparability

A characteristic of services indicating that they are produced and consumed at the same time, making the separation of service delivery from its consumption impossible.

Tour Company

A business that specializes in organizing travel tours and excursions, often providing guides, transportation, and itinerary planning services.

Gregarious Guy

A person who is very sociable, enjoys being in crowds, and often engages in social activities.

Idle Production Capacity

Occurs when the service provider is available but there is no demand for the service.