Which of the following observations is true of futures contracts?
A) Contracted through a dealer, usually a bank.
B) Customized to meet contracting company's terms and needs.
C) Typically no margin deposit required.
D) Traded on an exchange and acquired through an exchange broker

Question

Quizplus · Accepted Answer

Futures contracts are traded on an exchange and acquired through an exchange broker. Choices A and B are more representative of over-the-counter (OTC) derivatives, and choice C is incorrect as margin deposits are typically required for futures contracts to ensure performance of the parties involved.

Which of the Following Observations Is True of Futures Contracts