Speculators may use futures markets rather than spot markets because
A) transaction costs are lower in futures markets.
B) futures markets provide leverage.
C) spot markets are less efficient.
D) futures markets are less efficient.
E) transaction costs are lower in futures markets, and futures markets provide leverage.

Question

Quizplus · Accepted Answer

Futures markets often have lower transaction costs compared to spot markets, and they provide the advantage of leverage, allowing traders to control large positions with a relatively small amount of capital.

Speculators May Use Futures Markets Rather Than Spot Markets Because