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Which of the Following Are Advantages of Using Options for Futures

question 63

Multiple Choice

Which of the following are advantages of using options for futures speculation?
I.increased leverage
II.Potential losses are limited to the cost of the option.
III.Options are available on a broad range of commodity, index, and currency futures.
IV.Investors avoid the possibility of having to take delivery of the commodity.


Definitions:

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a given price over a certain period.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price in a given time period.

Surplus

The amount by which the quantity supplied of a product exceeds the quantity demanded at a specific price.

Quantity Supplied

The total amount of a particular good or service that producers are willing and able to sell at a given price over a specified period.

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