CFA Practice Question

There are 206 practice questions for this study session.

CFA Practice Question

Derivatives offer the potential for trading efficiency in ______.

I. cost of investing
II. transactions costs
III. liquidity
Correct Answer: I, II and III

User Contributed Comments 5

User Comment
dnoyelles how?
kutta2102 I - trader doesn't have to put down 100% value of the asset
II - if you view derivatives as insurance against an asset, the trading cost of any insurance should be less than that of underlying asset
III - all derivatives have a finite life and an active market exists.
bidisha good explanation, kutta2102.
johntan1979 Yes, thank you
angusmyers lol.. I read III. liquidity as "illiquidity".. I'm like - that can't possibly be right.
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