What Is the Biggest Difference Between an Option and a Futures

question 26

Multiple Choice

What is the biggest difference between an option and a futures contract?

• A) Options are traded on exchanges whereas futures are not
• B) Options give investors a way to manage portfolio risk while futures do not
• C) Options can be used by speculators to profit from price fluctuations while futures cannot
• D) Options give their holders the right to buy or sell whereas futures contract are obligations to buy or sell

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Definitions:

Environmental Tobacco Smoke

The mixture of smoke from the burning end of a cigarette, pipe, or cigar, and the smoke exhaled by the smoker, also known as secondhand smoke.

Caffeine

A stimulant found in coffee, tea, chocolate, and some medications, known for its ability to enhance alertness and reduce feelings of fatigue.

Drug Misuse

The inappropriate or unsafe use of drugs, including prescription medication, over-the-counter drugs, alcohol, and illicit substances.

American Adults

Typically refers to individuals aged 18 and over living in the United States, often studied in various contexts such as health, economy, and society.