QUESTION 41

1. Speculators may invest in futures markets rather than spot (cash) markets because:

   		a. Futures markets have lower transaction costs and higher leverage.
   		b. Futures markets are less price efficient.
   		c. Spot markets are less price efficient.
   		d. Futures markets provide leverage.

QUESTION 42

1. Which of the following terms is not specified in a futures contract? (1) The contract size. (2) The maximum acceptable price variation during the term of the contract. (3) The acceptable grade of the commodity of the contract. (4) The settlement price.

   		a. 2 only.
   		b. 2 and 3.
   		c. 1, 3, and 4.
   		d. 1, 2, 3 and 4.