The financial futures markets are designed to shift the risk of interest rate fluctuations from risk-averse investors to speculators who are willing to accept and possibly profit from such risks.

Question

Quizplus · Accepted Answer

This statement is true. Financial futures markets allow investors and speculators to trade contracts that represent a future obligation to buy or sell an underlying asset at a predetermined price. These contracts can be used to hedge against interest rate fluctuations or to speculate on potential price movements. By participating in these markets, investors can shift the risk of interest rate fluctuations to speculators who are willing to accept and possibly profit from such risks.

The Financial Futures Markets Are Designed to Shift the Risk