Which of the below statements is FALSE?
A) The key role of futures contracts is that, in a well-functioning futures market, these contracts provide a more efficient means for investors to alter their risk exposure to an asset.
B) A futures market will be the price discovery market when market participants prefer to use this market rather than the cash market to change their risk exposure to an asset.
C) The futures market and the cash market for an asset are drawn apart by an arbitrage process.
D) The argument that futures markets destabilize the prices of the underlying financial assets is an empirical question, but greater price volatility by itself is not an undesirable attribute of a financial market.
Correct Answer:
Verified
Q16: When a position is first taken in
Q17: In regards to a futures contract, which
Q18: One classification for financial futures is _.
A)
Q19: Which of the below statements is TRUE?
A)
Q20: As the value of a futures contract
Q22: There is a public belief that commercial
Q23: In regards to the Treasury notes futures
Q24: The futures price for the S&P 500
Q25: _ of only actively traded New York
Q26: In regards to interest rate futures contracts,
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