Investment VehiclesQuestion 40 of 110
A futures contract obligates the parties to do which of the following?
a.Nothing; it is an option that may be abandoned
b.Only the seller is obligated to perform
c.Only the buyer is obligated to perform
d.Both parties to buy or sell the underlying at a set price on a future date
Explanation
A futures contract is a binding agreement in which both the buyer and seller are obligated to transact the underlying asset at an agreed price on a specified future date. Unlike an option, it cannot simply be abandoned without offsetting the position. Futures are standardized and traded on exchanges.
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