A performance bond
A)is used to pay for futures agreements.
B)insures that both the buyer and seller of a future agreement abide by the agreement.
C)regulates futures agreements.
D)is paid for only by the buyer.

Question

Quizplus · Accepted Answer

A performance bond is a sum of money put up by both the buyer and seller of a future agreement to ensure that they both fulfill the terms of the agreement. If one party fails to meet their obligations, the bond can be used to compensate the other party for any losses incurred. It does not regulate futures agreements, nor is it paid for only by the buyer, and it is not used to pay for futures agreements.

A Performance Bond