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What are the answers for all these questions? Please help 5. Forward and futures contracts Aa Aa E The derivatives markets contain different types of
What are the answers for all these questions? Please help
5. Forward and futures contracts Aa Aa E The derivatives markets contain different types of contracts. Forward contracts, futures contracts, options, and swaps are some common types of derivatives contracts. Based on your understanding of forward and futures contracts, identify the differences between the two: Forward Futures Contracts Contracts These contracts possess performance risk, implying that the party having losses may not be able to make payments to fulfill the contract. For the execution of these contracts, brokers require both parties to maintain margin accounts or performance bonds to ensure that payments are made when the contract matures. These contracts cannot be executed for any quantity. Each contract specifies the volume of the assets traded, including the necessary technical specifications of the asset. True or False: The volume of trading conducted in contracts for interest rate and exchange rate futures is greater than the volume of trading occurring in commodity futures contracts. O False True Miguel feels strongly that the 10-year Government of Canada bond yield is too low. Which of the following derivative positions would let him earn a profit if he turns out to be right? O O O O A long position in interest rate futures A short position in interest rate futures A short position in structured notes A long position in structured notes Forward and futures currency contracts reflect an obligation to either buy or sell currency at a future date, whereas options are contracts traded between buyers and sellers that give the option holder the right, but not the obligation, to buy or sell a specific (underlying) asset at a specific price, called the exercise or strike price, on or before an expiration date. A put option gives the option holder the right to sell an asset at a fixed price during a particular periodStep by Step Solution
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