As a result of the small margin requirements, investing in futures contracts is considered risky.

Name: As a result of the small margin requirements, investing in futures contracts is considered risky.
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Question

As a result of the small margin requirements, investing in futures contracts is considered risky.​

Quizplus · Accepted Answer

Small margin requirements mean that investors only have to put down a fraction of the total value of the contract, which amplifies potential gains but also increases the risk of large losses. Therefore, futures contracts are considered risky investments.

As a Result of the Small Margin Requirements, Investing in Futures