Asked by Jason Carbonetti on Jul 09, 2024
Verified
In a futures contract, the futures price is
A) determined by the buyer and the seller when the delivery of the commodity takes place.
B) determined by the futures exchange.
C) determined by the buyer and the seller when they initiate the contract.
D) determined independently by the provider of the underlying asset.
E) None of the options are correct.
Futures Price
The agreed price for the future sale or purchase of an asset in a futures contract.
Futures Exchange
A central marketplace where individuals can buy and sell futures contracts and options on futures contracts.
Delivery Date
The specific date on a futures or options contract on which the underlying asset must be delivered or settled.
- Understand the concept and function of futures contracts and their use in financial markets.
Verified Answer
JB
Jessica BroyhillJul 16, 2024
Final Answer :
C
Explanation :
The futures price in a futures contract is determined by the buyer and the seller when they initiate the contract, based on their expectations of future price movements of the underlying asset.
Learning Objectives
- Understand the concept and function of futures contracts and their use in financial markets.