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      Question

      Which of the following has an asymmetric payoff

      structure?
      A Futures and Options Correct Answer Incorrect Answer
      B Futures Correct Answer Incorrect Answer
      C Options Correct Answer Incorrect Answer
      D Swaps Correct Answer Incorrect Answer
      E Forwards Correct Answer Incorrect Answer

      Solution

      An asymmetric payoff occurs when the upside potential is greater than the downside risk, or when the payoff is non-linear, such as when losses are limited but gains are theoretically unlimited. Conversely, instruments like forwards typically have symmetric payoffs, where gains and losses are linear and proportional.

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