Explain a future contract
What will be an ideal response?
A future contract (or future) is simply a promise to buy or sell a commodity (e.g., a currency) for a specified price, with both delivery and payment to be made at a specified future date. Because there is a market in futures (they are sold on commodity exchanges), such contracts are both standardized and transferable. Trading in futures, however, seldom results in the physical delivery of the commodity. More often, the obligations of the parties are extinguished by offsetting transactions that produce a net profit or loss. Futures are used primarily as a way to transfer price risks from suppliers, processors, and distributors (called hedgers when they become parties to these hedging contracts) to those who are more willing to take the risk (called speculators).
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Activists are very unhappy with the Board of Directors' recent pattern of decisions. They believe that they need to be given more decision-making capabilities, have their voices heard, and nominate another Board member. What should the activists propose?
a. A hostile takeover b. A proxy vote c. A coup d'état d. A dumping of shares to drop stock price and force actions by the Board
Cross-sectional sampling is either random or nonrandom
Indicate whether the statement is true or false