Futures Contracts Differ from Forward Contracts in That

question 119

Multiple Choice

Futures contracts differ from forward contracts in that

• A)they can be used by financial managers to reduce risk.
• B)they provide their holder with an opportunity to buy or sell an asset at some future time if the asset's value has changed in a manner favourable to the futures contract holder.
• C)they sustain a small change in value when there is a small change in the price of the underlying commodity.
• D)they are for standardized commodities in standardized quantities and have standardized expiration dates.

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