Shaq Buys a Futures Contract Today

question 3

Multiple Choice

Shaq buys a futures contract today.Which of the following is true?

• A) Shaq agrees to buy the asset at a fixed price at some future date.
• B) Shaq will get dividends on the underlying asset.
• C) Shaq acquires voting rights on the asset.
• D) Shaq will have to return the asset when closing out his position.
• E) None of these answers are correct.

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Definitions:

Equity Mutual Fund

A type of mutual fund that invests principally in stocks, aiming to provide returns through dividends and capital gains.

Small Investor

An individual who invests limited amounts of money in the stock market or other investment vehicles.

Stock Holdings

The shares owned by an individual or corporation, including stocks in companies or corporations as part of an investment portfolio.

Random Walk Theory

A financial theory suggesting that stock prices change randomly and are not influenced by past movements, making it impossible to predict future market directions consistently.