Multiple Choice
Which of the following are advantages of derivatives?
A) lower transaction costs than securities and commodities
B) reveal information about expected prices and volatility
C) help control risk
D) make spot prices stay closer to their true values
E) all of the above
Correct Answer:
Verified
Correct Answer:
Verified
Q19: Cash markets are also known as<br>A)speculative markets<br>B)spot
Q20: The positive relationship between risk and return
Q21: Storing an asset entails risk.
Q22: The process of selling borrowed assets with
Q23: Swaps,like options,trade on organized exchanges.
Q25: A transaction in which an investor holds
Q26: Lower transaction costs are one advantage of
Q27: The theoretical fair value is the only
Q28: Investors who do not consider risk in
Q29: A call option on a futures contract