Which of the Following Is Correct About Futures Contracts

question 37

Multiple Choice

Which of the following is correct about futures contracts?

• A) Buyers of futures contracts make a profit when prices fall.
• B) Buyers of futures contracts make a profit when interest rates rise.
• C) Sellers of futures contracts make a profit when prices fall.
• D) Sellers of futures contracts make a profit when prices rise.
• E) a. and d.

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Definitions:

Income Statement

A financial document that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and profits.

Dividend Yield Ratio

A financial ratio that shows how much a company pays out in dividends each year relative to its share price.

Par Value

A nominal value assigned to a security or stock as stated in the corporate charter.

Dividend Payout Ratio

This is a financial ratio that measures the percentage of earnings paid to shareholders in the form of dividends.