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The number of contracts outstanding in a particular financial future is the ____.
A) demand coefficient
B) open interest
C) index level
D) outstanding balance
Answer: B
Diff: 1 Type: MC Page Ref: 329
Skill: Recall
Objective List: 14.1 Distinguish among forwards, futures, options, and swaps
The advantage of forward contracts over futures contracts is that forward contracts
____.
A) are standardized
B) have lower default risk
C) are more flexible
D) have higher default risk
Answer: C
Diff: 1 Type: MC Page Ref: 330
Skill: Applied
Objective List: 14.1 Distinguish among forwards, futures, options, and swaps
Futures markets have grown rapidly because futures ____.
A) are standardized
B) have higher default risk
C) are illiquid
D) are more flexible
Answer: A
Diff: 1 Type: MC Page Ref: 330
Skill: Recall
Objective List: 14.1 Distinguish among forwards, futures, options, and swaps
Futures differ from forwards because they are ____.
A) used to hedge portfolios
B) used to hedge individual securities
C) used in both financial and foreign exchange markets
D) standardized contracts
Answer: D
Diff: 2 Type: MC Page Ref: 330
Skill: Recall
Objective List: 14.1 Distinguish among forwards, futures, options, and swaps