Question
Futures and options are financial securities that help businesses manage risk. Find below a list of four characteristics (W, X, Y, and Z) that describe
Futures and options are financial securities that help businesses manage risk. Find below a list of four characteristics (W, X, Y, and Z) that describe these securities. For each characteristic is a blank into which "futures" or "options" correctly fits. W: ____ are free but you must deposit collateral to validate the security X: For one underlying asset there exists two different types of ____ and each of those two has one long and one short position Y: A short ____ position entails an obligation only when the long side chooses to exercise the contract Z: A long ____ position entails a right, not an obligation, to either exercise or cash out of the contract Choose the statement that correctly matches all characteristics for that type of security.
a. | These characteristics, ( W ), are all that pertain to options | |
b. | These characteristics, ( W Y Z ), are all that pertain to futures | |
c. | These characteristics, ( W Y Z ), are all that pertain to options | |
d. | These characteristics, ( W ), are all that pertain to futures | |
e. | These characteristics, ( X ), are all that pertain to options |
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