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Answer: The settlement price for the most active contract is above the high price for the day.
The correct answer is C. The reported high price of a futures contract should reflect all prices for the day, so the settlement price should never be greater than the high price. This is because the settlement price is the price at which the contract is marked to market at the end of the trading day, and it is calculated based on the closing prices of the contract. If the settlement price were to be higher than the high price, it would indicate an error or inconsistency in the data, which could be a potential problem for a risk manager examining the quotes.
Author: LeetQuiz Editorial Team
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A seasoned risk manager specializing in commodities is performing an analysis of corn futures prices listed by the CME Group. Out of the following considerations, which insight is the risk manager most likely to identify as a potential problem with the provided price data?
A
The volume in a specific contract is greater than the open interest.
B
The prices indicate a mixture of normal and inverted markets.
C
The settlement price for the most active contract is above the high price for the day.
D
There is a contract with maturity every month.
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