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Financial Risk Manager Part 1

Financial Risk Manager Part 1

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A risk manager is deciding between buying a futures contract on an exchange and entering into a forward contract directly with a counterparty on the same underlying asset. Both contracts would have the same maturity and delivery specifications. The manager finds that the futures price is lower than the forward price. Assuming no arbitrage opportunity exists, and interest rates are expected to increase, what single factor acting alone would be a realistic explanation for this price difference?

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