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Which of the following statements are true about futures markets? Check all that apply: a. The...

Which of the following statements are true about futures markets?

Check all that apply:

a. The clearinghouse acts as an intermediary between the two parties of the contract.

b. If one of the parties fails to meet its obligations, the clearinghouse bears all the losses from the failure.

c. A trade in which a trader takes an opposite position to their currently open position is called a reversing trade.

d. Open interest can be defined as a sum of the long and short positions.

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Answer #1

a. The clearinghouse acts as an intermediary between the two parties of the contract.

c. A trade in which a trader takes an opposite position to their currently open position is called a reversing trade.

d. Open interest can be defined as a sum of the long and short positions.

These statement are true.

While the losses are not beared by the Intermediaries. So, only option b is false.

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