Question

Which of the following duties is not performed by the clearinghouse

A) holding margin deposits b) guaranteeing performance of buyer and writer c) maintaining records of transaction d) none of the above

What are circuit breakers?

a) rules that stop trading when futures are about the expires b)a system that shut down the exchange computer during periods of abnormal price changes c) rules that limit the number of contracts a speculator can hold D) none of the above

Despite the facts that forward contracts carry move credit risk than futures contracts, forward contracts offer what primary advantage over futures contracts ?

a) forward contracts prevent the writer from assuming the credit risk off the buyer b)terms and conditions are tailored to the specific needs of the two parties involved c)transaction information between the two parties involved in the forward contract readily available to the public d) conditions of the forward contract, such as delivery date and location, cannot be altered

Answer 1

The clearing house performs all the duties . They collect the margin money, keep record of the data, collecting all the deliveries of the stocks that are bought and sold. They also endure that none of the party defaults.

So, the correct option is option D.

The circuit breakers : is a system that shut down the exchange computer during periods of abnormal price changes.

So, the correct option is option B.

The difference between the forwards and futures is that: the forward contracts allows the terms and conditions to be tailored as per the specific needs of the two parties involved. Forward contracts are customized contracts.

So, the correct option is option B.