Financial futures are agreements to buy or sell financial assets on a future date at a price that is set today. They allow investors to hedge against market fluctuations and manage risks in their portfolios. The price agreed upon today is called the futures price, and the difference between the futures price and the market price at the time of settlement is settled in cash.

Solved

Financial Futures

Question 88

Multiple Choice

Financial futures

A) are agreements to buy or sell financial assets today at a price that will be determined in the future.
B) charge a futures premium in addition to a small brokerage fee.
C) can be used only to speculate and are always very risky.
D) are agreements to buy or sell financial assets on a future date at a price set today.

Correct Answer: