What is the main purpose of futures contracts?*1 pointa) To provide a guaranteed return on investmentb) To replace traditional investments like stocks and bondsc) To transfer risk from one party to anotherd) To eliminate the need for financial intermediaries

What is a futures contract?*1 pointa. A contract that gives the holder the right to buy an asset at a specific priceb. A contract that obligates the holder to sell an asset at a specific pricec. A contract that gives the holder the right to sell an asset at a specific priced. A contract that obligates the holder to buy an asset at a specific price

Which of the following statements about futures are true:I. Futures is a standardised contract to buy or sell a specific commodity or financial instrument at a specific price at a predetermined future date;II. In Australia bonds futures are usually quoted at an index figure of 100 minus the yield so a dealer can follow a basic principle of buy low and sell high;III. Novation is the process to renew futures contracts when they fall due;IV. Standard delivery is more usual in futures markets.

Which of the following is a key advantage of futures contracts over forward contracts?  A. Customizable terms  B. Lack of counterparty risk  C. Standardized terms  D. Settled at the discretion of the parties involved

In the futures markets, if a futures contract is marked-to-market, this refers to the:Question 3Select one:a.interaction of the demand and supply forces in the market to determine the price of the options contract.b.interaction of the demand and supply forces in the market to determine the price of the futures contract.c.settlement of gains and losses on futures contracts on a daily basis.d.settlement of gains and losses on forward contracts on a daily basis.

What is a key feature of futures contracts that distinguishes them from forward contracts?  A. Futures have standardized terms  B. Futures have longer maturities  C. Futures cannot be traded on exchanges  D. Futures involve physical delivery