Which is a key difference a manager should note in choosing between forward and futures contracts? a. Exchange trading makes forward contracts more liquid. b. Futures contracts carry standardized terms, while forward contracts can be tailored to meet specific needs. c. Futures contracts have greater default risk than forward contracts. d. Forward contracts require initial margin deposits and daily marking to market, while futures do not

Q: "Futures contracts allow individual investors to protect themselves against volatility in interest…

A: Future contracts are derivative contracts which allows investors to purchase a security/commodity or…

Q: Which statement is true about the difference between futures and forward contracts?

A: The true statement about the difference between future and forward contracts is:3. Futures contracts…

Q: 1.The coefficient of risk aversion can be used to create indifference curves. The higher the A, the…

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A: Options given in the question:A.) A flat yield curve occurs when the yield-to-maturity is virtually…

Q: Derivative securities play a large and increasingly important role in financial markets. These…

A: Derivative securities are financial instruments whose value is derived from, or dependent on, the…

Q: Compared to short hedging, the advantage to using a put option is: A. Put options involve a…

A: A put option is a contract giving the owner the right, but not the obligation, to sell the…

Q: The overthecounter ​(OTC) market is​ ________.   A.a market where​ smaller, unlisted securities…

A: The financial market is related to the market where buyers and sellers trade financial instruments…

Q: . Derivative securities are also called contingent claims because a. their owwners may hoose…

A: Derivative securities are securities whose payment completely depends on the value of other assets.…

Q: Which of the following is NOT true O a. Futures contracts nearly always last longer than forward…

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Q: (multiple answers) Choose all correct answers. O Using backtesting with ex-post comparison can…

A: Financial institutions A financial institution refers to the company that is involved in the dealing…

Q: A firm gives all its employees American-style call options on the firm's stock. The options have a…

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Q: Explain why speculating in derivatives, futures contracts and options is not appropriate for the…

A: Speculation regulates the international financial system. Future action in stock market is dependent…

Q: Which of the following best describes the terms 'long position' and 'short position' in trading?…

A: Trading in the financial markets is often based on speculating future price movements of assets such…

Q: By acting as the counterparty to every futures position, the exchange eliminates the A) market B)…

A: The correct answer to the question is "B) credit".Credit risk is the risk that there will be a…

Q: Users of commodities are:   a. Usually not participants in futures contracts. b. Speculators…

A: The term commodity refers to the goods that can be exchanged with other goods or for money like oil,…

Q: If spot price falls below the exercise price, seller of a futures contract makes a ______ while…

A: Futures . Futures are derivative that are entered to mitigate risk with regard to price movements.…

Q: The key difference between a forward and a futures contract is: A forward contract is bought and…

A: Here discuss about the details of forward contract and future contract which are related with the…

Q: Which of the following is incorrect regarding margin trading? O a. The relationship between security…

A: Margin trading (MT) is the benefit which is provided by the trader to the investors to purchase…

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A: Margin is the amount that is deposited as a security in the derivative contracts.

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Q: nvestors choose deri tives

A: derivatives are financial instruments whose value is derived from an underlying asset such as bonds…

Q: Derivative securities play a large and increasingly important role in financial markets. These…

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Q: A primary market is: -the financial market where new security is sold for the first time. -the…

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Q: Futures contracts offer more flexible terms than a forward contract. True False

A: Futures and Forward contracts are contracts which allows to buy or sell an underlying asset at a…

Q: 6. Which one of the following statements is incorrect regarding the margining of exchange-trade…

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Q: Value forward agreements normally have adjustments dependent on the price of the equity, worth of…

A: The value of the forward agreement is an agreement that has already specified its assets to be…

Q: Which is true about Futures contracts? a. is not traded on an organized exchange and is customized…

A: A futures contract is an agreement between two parties to acquire or sell an item at a specific time…

Q: Derivatives are obtained to be used as hedging instrument to manage some kind of risk. for…

A: Derivatives are the type of instrument which is used for financial asset, liability or trading…

Q: The number of futures contracts that a bank will need in order to fully hedge its overall interest…

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Q: 5. Which of the following is incorrect regarding establishing central counterparties (CCPs)? (a)…

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Q: Several investment committee members have asked about interest rate swap agreements and how they are…

A: Swaps are financial derivatives contracts that involve the exchange of cash flows or financial…

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A: Risk is the uncertainty or potential loss in an investment decision.

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A: The question is based on the concept of future derivative contract, which is define as an exchange…

Q: The bid-ask spread:   a. Includes a transaction cost component to compensate liquidity providers…

A: Bid-ask spread can be explained as the difference between the price at which a trader is willing to…

Q: O None of the options are correct. D

A: A loan refers to a debt that is to be incurred by an individual or an institution. The lender…

Q: e different than Over the counter markets because on exchanges A. Futures contracts are…

A: Step 1 Via-the-Counter (OTC) trader is a trader market divided into areas where traders and…

Q: All of the statements below are true of futures contractsexcept that futures contracts: O a. result…

A: Future contract are those contracts to buy or sell commodity or financial instruments at a…