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- Which is true about Futures contracts? a. is not traded on an organized exchange and is customized to meet the needs of the parties. b. is not traded on an organized exchange and is subject to formal regulations which results in standardized contrasts. c. is traded on an organized exchange and is subject to formal regulations which results in standardized contrasts. d. is traded on an organized exchange and is customized to meet the needs of the parties.Exchanges are different than Over the counter markets because on exchanges A. Futures contracts are standardized B. All of the Above C. Futures require margin D. Futures are traded on an exchanges that clearA) What are the main differences between forward contracts and futures contracts. b) What is meant by the Exchange Delivery Settlement Price' (EDSP) of a fut
- Can a derivative security's value be determined by an underlying single stock (e.g., IBM, MMM, GE)? If no, explain. Can a derivative security's value be determined by an underlying fixed income index? If yes, explain. What is the difference objective, if any, between a long futures contract, a put option contract, and a long forward contract? What are the two primary functions of derivative securities (i.e., what classifications of participants do they serve)? Finally, what does "market efficiency" suggest? Explain the significant advantage and disadvantage of Inflation Protected Treasury Bonds (TIPS). Who or what investor would likely prefer a municipal bond issued by the Commonwealth of Virginia? If a corporate bond yields 8%, to be competitive (e.g., indifferent), what would a municipal bond need to yield for an investor in the 40% tax bracket? In municipals, what, if any, is the difference between a general obligation and revenue bond? What is a pass-through security, a conforming…A futures contract a. is not traded on an organized exchange and is customized to meet the needs of the parties. b. is not traded on an organized exchange and is subject to formal regulations which results in standardized contrasts. c. is traded on an organized exchange and is subject to formal regulations which results in standardized contrasts. d. is traded on an organized exchange and is customized to meet the needs of the parties.The key difference between a forward and a futures contract is: A forward contract is bought and sold on organized exchanges. Only the forward contracts have settlement dates A forward contract is highly customized where a futures contract is not. All of the above.
- The advantage of over-the-counter products such as swaps or forwards contracts,relative to exchange-traded products such as options or futures, is: * A. standardization B. regulation C. flexibility. D. all of the given answersWhich derivative does not reduce financial risk?a. optionsb. swapsc. futuresd.forwardse. answer not givenThe advantage of over-the-counter products such as swaps or forwards contracts, relative to exchange-traded products such as options or futures, is: a. regulation. b. standardisation. c. flexibility. d. all of the given answers.
- Which of the followings is not derivative instruments, Select one: Oa. Shares O b. Financial options O c. Forwards O d. Currency swapsWhat are the key differences between future and forward contracts? a) direct contract for forwards b) clearing house for futures c) futures have less risk d) futures have a standard amountWhich of the following is NOT true O a. Futures contracts nearly always last longer than forward contracts O b. Delivery or final cash settlement usually takes place with forward contracts; the same is not true of futures contracts. O c. Futures contracts are standardized; forward contracts are not. O d. Forward contracts usually have one specified delivery date; futures contract often have a range of delivery dates.