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Basic Question 9 of 11
A futures contract is ______.
B. a sales contract traded on an organized exchange where the amount, maturity and price are set in advance
C. a contract that establishes a specific maturity date and amount, but not the specific price
D. a derivative that limits the effects of fluctuations beyond a predetermined range
A. a swap that exchanges one series of payments for another
B. a sales contract traded on an organized exchange where the amount, maturity and price are set in advance
C. a contract that establishes a specific maturity date and amount, but not the specific price
D. a derivative that limits the effects of fluctuations beyond a predetermined range
User Contributed Comments 3
| User | Comment |
|---|---|
| BunnyBaby | Nice! 10/12 |
| Shaan23 | got tricked....price is not standardized but still set in advance |
| ankurwa10 | sales contract implies one party sells and the other buys. but why not D? Does future have unlimited downside as well as upside risk? isn't that the reason why I would buy a futures contract, to limit them? |
You have a wonderful website and definitely should take some credit for your members' outstanding grades.
Colin Sampaleanu
Learning Outcome Statements
define forward contracts, futures contracts, swaps, options (calls and puts), and credit derivatives and compare their basic characteristics
CFA® 2024 Level I Curriculum, Volume 5, Module 2.