Which of the following features are shared by futures contracts and options?
I. They have specified expiration dates.
II. Their value is derived from changes in the value of some other asset.
III. Unprofitable futures or options can simply be allowed expire unexercised.
IV. The obligate the buyer and seller to exchange cash for the underlying asset on the expiration date.
A) I and II only
B) I and IV only
C) II and III only
D) I, II and III only

Question

Quizplus · Accepted Answer

Both futures contracts and options have specified expiration dates (I) and their value is derived from changes in the value of some other asset (II). However, only options can be allowed to expire unexercised without obligation (III), and only futures obligate both parties to exchange the underlying asset (IV).

Which of the Following Features Are Shared by Futures Contracts