10.Why is the initial value of a futures contract zero?

Select one:

a.

None of the options

b.

The futures is immediately marked-to-market

c.

The expected profit is zero

d.

The basis will converge to zero

e.

You do not pay anything for it

11.Under uncertainty and risk aversion, todays spot price equals

Select one:

a. None of the options

b. The expected future spot price, minus the storage costs, minus the risk premium

c. The expected future spot price, minus the storage costs, minus the interest forgone, plus the risk premium

d. The future spot price minus the cost of storage

e. The expected future spot price, minus the storage costs, minus the interest forgone, minus the risk premium

12.Futures prices differ from spot prices by which one of the following factors? Select one:

a. The risk premium

b. The spread

c. The systematic risk

d. The cost of carry

e. None of the options