Exam of Beloy (2nd) Flashcards
Futures contracts are slower to absorb new information than forward contracts.
FALSE
Future contracts are more liquid than forward contracts.
TRUE
A contract is an agreement between two parties to buy or sell an asset at a certain time in the future at a certain price is known as:
FUTURE CONTRACT
An advantage of a forward contract over a futures contract is that
THE TERMS OF THE CONTACT ARE FLEXIBLE
What is not incuded in financial derivatives?
GOLD
A primary function of futures markets is to allow investors to transfer risk.
TRUE
Forward contracts are used primarily by small firms and individuals because they can be tailored to the needs of those clients.
FALSE
When a contract is marked to market?
THE MARGIN ACCOUNT OF THE CONTRACT HOLDER IS ADJUSTED
Which of the following is not common to both forward contracts and future contracts?
BOTH HAVE THE BUYER TAKING FUTURE DELIVERY OF THE ASSETS IN QUESTION
what is the essential feature(s) of forward contract?
ALL OF THE CHOICES
The primary benefit of a future contract is
INTERVENTION ON THE TRADERS BEHALF EITH GOV. ( correct answer: Indemnifying…
Which of the following are the types of forward contract?
ALL OF THE CHOICES
What is an essential feature(s) of future contract?
ALL OF THE CHOICES
A futures contract eliminates uncertainty about the future spot price that an individual can expect to pay for an asset at the time of delivery.
TRUE
Future contract is traded on a financial exchange.
TRUE
In a forward contract agreement, the quantity of product to be traded, the time of the actual trade and the price are determined at the time of the agreement.
TRUE