Futures contracts were developed to
A)increase the market share of commercial banks.
B)reduce the risk of future price changes.
C)prevent convergence.
D)None of the above

Question

Quizplus · Accepted Answer

Futures contracts were developed as a way to reduce the risk of future price changes, allowing buyers and sellers to hedge against or lock in prices for commodities, currencies, and other assets. They do not affect the market share of commercial banks nor prevent convergence, as convergence is actually an important feature of futures contracts.

Futures Contracts Were Developed to