Some Investors Combine Two or More Different Futures Contracts into One

question 100

Multiple Choice

Some investors combine two or more different futures contracts into one investment position that offers the potential for generating a modest amount of profit while restricting exposure to loss. This practice is called

• A) speculating.
• B) spreading.
• C) gambling.
• D) market making.

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Definitions:

Defaulted Note

A note or loan for which the borrower has failed to make the agreed-upon payments by the due date.

Account

An accounting device used in bookkeeping to record increases and decreases of business transactions relating to individual assets, liabilities, capital, withdrawals, revenue, expenses, and so on.

Discounting Note Receivable

The process of reducing the value of a note receivable to reflect its current worth by applying an interest rate.

Endorsing Note

A legal act of signing the back of a negotiable instrument, such as a check, to assign its benefits to another party.