Currency futures contracts sold on an exchange contain:
A) a commitment to the owner, and are standardized.
B) a commitment to the owner, and can be tailored to the owner's desire.
C) a right but not a commitment to the owner, and can be tailored to the owner's desire.
D) a right but not a commitment to the owner, and are standardized.

Question

Quizplus · Accepted Answer

Currency futures contracts sold on an exchange are standardized, meaning they have set contract sizes, delivery dates, and settlement procedures. The contract represents a commitment to buy or sell a set amount of currency at a predetermined price on a specific future date. Therefore, choice A is the best answer. Choices B and C are incorrect because currency futures contracts are standardized, and cannot be tailored to the owner's desires. Choice D is incorrect because currency futures contracts do represent a commitment to the owner.

Currency Futures Contracts Sold on an Exchange Contain