Which of the Following Is True for Futures, but Not

question 32

Multiple Choice

Which of the following is true for futures, but not for forwards?

• A) actual delivery.
• B) no transactions costs.
• C) self regulation.
• D) none of the above

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Definitions:

Premium

The amount by which the price of a financial instrument or security, like an insurance policy, bond, or stock, exceeds its face value or nominal value.

Straight-Line Method

A technique for determining depreciation or amortization by uniformly spreading an asset's cost throughout its lifespan.

Amortizes

The process of gradually writing off the initial cost of an asset over a period, effectively spreading the cost over its useful life.

Accrued Interest

Accrued interest is the interest on a loan or bond that has accumulated since the principal investment or last payment period but has not yet been paid.