The cash settlement of a futures contract does NOT:
A) result in the trader realising a profit or loss on their futures trading
B) overcome the need for the futures market to arrange physical settlement of many of the contract items
C) depend on the difference between the contracts buying price and their selling price
D) require that traders own the contract item
E) end the traders obligations under the futures contract.
Correct Answer:
Verified
Q45: A bank can hedge an exposure to
Q46: A borrower can hedge against adverse movements
Q47: A speculator who forecasts an unexpected fall
Q48: The manager of a diversified equity portfolio
Q49: Hedging with futures generally involves basis risk.
Q51: The 10-year bond futures contract can be
Q52: An advantage of futures contracts over FRAs
Q53: The SPI futures contract can be settled
Q54: The trader who holds the long position
Q55: Futures contracts can be used for:
A)hedging exposures
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