Two important functions carried out by futures markets are:
A) both price discovery and settlement of future exchange rate transactions
B) both risk transfer and settlement of future exchange rate transactions
C) both price discovery and research
D) both price discovery and risk transfer

Question

Quizplus · Accepted Answer

Futures markets play a crucial role in price discovery, which involves determining the future price of an asset through market dynamics. They also facilitate risk transfer, allowing parties to hedge against price fluctuations in the commodities, currencies, or securities markets.

Two Important Functions Carried Out by Futures Markets Are