Standardization of derivative contracts
A)increases their liquidity.
B)is the rule with respect to contracts whose underlying asset is a financial security, but not for contracts whose underlying asset is a commodity.
C)is the rule with respect to contracts whose underlying asset is a commodity, but not for contracts whose underlying asset is a financial asset.
D)has been proposed many times by financial analysts, but has not yet been carried out by the SEC.

Question

Quizplus · Accepted Answer

Standardization of derivative contracts, which involves creating uniform terms and specifications, increases their liquidity as it simplifies trading and makes it easier for participants to buy and sell. It applies to both financial securities and commodities.

Standardization of Derivative Contracts