One of the Safeguards Placed on Trading in Organized Futures

question 30

Multiple Choice

One of the safeguards placed on trading in organized futures exchanges is the price limit which is based on the assumption that futures prices

• A) are heavily influenced by trader collusion on pricing
• B) are heavily dependent on the cash market prices
• C) are historically volatile and prone to overreact to new information
• D) do not behave according to the laws of supply and demand