Which of the following statements relating to the use of futures contracts is NOT correct? Select one: a. Futures contracts are derivative products that derive from a physical market product. b. The pricing of futures contracts is based on the price of the underlying market product. C. Future physical market price changes are offset by a profit or loss in the futures market. d. Futures contracts are generally closed out by delivery of the physical market product.

Which of the following statements relating to the use of futures contracts is NOT correct? Select one: a. Futures contracts are derivative products that derive from a physical market product. b. The pricing of futures contracts is based on the price of the underlying market product. C. Future physical market price changes are offset by a profit or loss in the futures market. d. Futures contracts are generally closed out by delivery of the physical market product.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Which of the following statements relating to the use of futures contracts is NOT correct?
Select one:
a.
Futures contracts are derivative products that derive from a physical market product.
b.
The pricing of futures contracts is based on the price of the underlying market product.
C.
Future physical market price changes are offset by a profit or loss in the futures market.
d.
Futures contracts are generally closed out by delivery of the physical market product.

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