CAF-7 · Chapter 10 · Question 7 of 15
In the context of financial futures contracts, what does the term 'tick' represent?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) The minimum allowable price movement for the futures contract
Explanation
A tick is the smallest increment by which a futures price can fluctuate. Exchanges define tick sizes to standardize trading, and every tick movement translates to a specific financial gain or loss for the investor.
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