Financial Risk Manager Part 1
Get started today
Ultimate access to all questions.
Comments
Loading comments...
Ultimate access to all questions.
Which of the following is correct regarding futures prices and spot prices?
A
Futures prices may vary widely from the spot price of the underlying asset, but the two prices will typically converge as a futures contract approaches maturity.
B
Arbitrageurs keep the futures price and the underlying spot price close to each other throughout the life of the contract.
C
If the futures price is above the underlying spot price during the delivery period, a trader can profit by buying futures contracts and selling the underlying asset in the spot market.
D
The S&P 500 futures contract has the most trading activity of any futures contract due to its requirement to take physical delivery on the delivery date.