Explain carefully what is meant by the expected price of a commodity on a particular future date Suppose that the futures price of crude oil declines with the maturity of the contract at the rate of 2 per year Assume that speculators tend to be short crude oil futures and hedgers tended to be long ...

To understand the meaning of the expected future price of a commodity suppose that there are differe ...

Explain carefully what is meant by the expected price of a commodity on a particular future date.

Question:

Explain carefully what is meant by the expected price of a commodity on a particular future date. Suppose that the futures price of crude oil declines with the of the contract at the rate of 2% per year. Assume that speculators tend to be short crude oil futures and hedgers tended to be long crude oil futures. What does the Keynes and Hicks argument imply about the expected future price of oil? Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...