All futures contracts are traded on a margin basis. What does "margin" mean, and how does the use of margin affect the inherent risk-return nature of the futures market?
What will be an ideal response?
Answer: Margin refers to the amount of equity that goes into a purchase. The use of margin in the futures market means that there is a great deal of leverage involved, and therefore a great deal of risk. Consequently, the pay-offs can be tremendous, but so can the losses.
Learning Outcome: F-01 Describe the different financial markets and the role of the financial managers
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In order to combat U.S. corporations' use of illegal payments and bribes in international business dealings, Congress enacted:
a. the Future Corporation Protection Act. b. the Foreign Corrupt Practices Act. c. the Foreign Trade Act. d. the International Treaty Clause.
Before a sport manager is liable for negligence, the plaintiff must show that the sport manager owed the plaintiff a duty of care. A legal duty of care arises from which of the following origins?
A. A relationship inherent in a particular situation B. A voluntary assumption of the duty of care C. A duty mandated by a law D. All of these are correct.