Understanding Futures Contracts

What is a key benefit of purchasing a futures contract?

• No expiration date

• Immediate ownership of the asset

• Guaranteed profit

• Protection against market fluctuations

Which of the following is NOT a type of futures contract mentioned?

• Metal futures

• Commodity futures

• Real estate futures

• Currency futures

How do futures differ from options?

• Futures allow choice at expiration

• Futures have no expiration date

• Futures are optional to execute

• Futures obligate the holder to transact

What is a common reason traders buy futures without intending to take delivery?

• To receive dividends

• To avoid taxes

• To own the underlying asset

• To speculate on price changes

How can futures be used as a hedging tool?

• By guaranteeing a profit

• By eliminating all investment risks

• By ensuring a fixed price for future transactions

• By avoiding market regulations