Futures trading
A) allows speculators to profit
B) calls for delivery under all circumstances
C) is only a gamble with no real economic value
D) is a non-zero-sum game
E) all of the above

Question

Quizplus · Accepted Answer

Futures trading allows speculators to profit by predicting the future price movements of commodities, currencies, and other financial instruments. It is a risky investment, but it can yield significant profits for those who are successful. While delivery of the underlying asset can occur in some cases, many futures contracts are settled in cash, making them more accessible to traders who do not want to take physical delivery of the asset. While futures trading is speculative, it does have real economic value as it provides a way for producers to hedge against price fluctuations and manage risk. Finally, futures trading is a zero-sum game, where winners' gains are matched by losers' losses, which means the market's overall value does not change.

Futures Trading