Which One of the Following Contracts Requires No Cash to Change

question 67

Multiple Choice

Which one of the following contracts requires no cash to change hands when initiated?

• A) listed put option
• B) short futures contract
• C) forward contract
• D) listed call option

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Definitions:

Efficient Markets

A concept that asserts that financial markets are "informationally efficient," meaning that prices of securities reflect all available information at any given time.

Opportunity Cost

The cost of choosing one alternative over another, typically representing the benefits you could have received by taking a different action.

Alternative Use

The potential other applications or purposes for which a resource, asset, or investment could be utilized instead of its current use.