A Futures Contract Is a Specialized Form of a Forward

question 96

True/False

A futures contract is a specialized form of a forward contract distinguished by an organized exchange which encourages confidence in the futures market by allowing for the effective regulation of trading.

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Definitions:

Treasury Stock

Shares that were issued and subsequently reacquired by the issuing company, reducing the amount of outstanding stock on the open market.

Fixed Assets

Long-term tangible assets used in the operation of a business that are not intended to be sold within a year, such as buildings, machinery, and equipment.

Equity Capital

The amount of money that is invested into a business by its owners in exchange for a share of ownership.

Dividend Payments

Distribution of a portion of a company's earnings to its shareholders, usually in cash or additional stock.